Another major housing market in Canada is reeling
There are number of predictions about first-time home buyers in Canada becoming excluded from housing market in Canada because mortgage stress test are becoming true.
As president of Sherwood Mortgage Group told CREW in the late last year about guideline B-20, as stress test is best known and would catalyze decline in real estate market activity and millennial-aged homebuyers in Canada would bear brunt.
Anthony Contento said that this will be isolated to the certain individuals. Anthony also said that will there be drop in price? Possibly; he anticipated between 5% and 10%, but their real estate will continue to surge up, rate of interest will continue to stay down.”
It is true that interest rates are low relative to the historical levels—as they are climbing up—and is also true that real estate in Canada has continued in surging. As reported by Montreal Gazette, first-time home buyers in Canada are quickly losing power to buy home.
Paul Cardinal, economist at Greater Montreal Real Estate Board said that what they are known for sure is that 2nd and 3rd time home buyers are too active right now in the real estate market. “If you’re first-time home buyer, you’re looking at a condo instead of a single-family home or the western part or eastern part of Montreal.
This city was born to witness to the 15 consecutive quarters of rise in home sales—Q1 of year 2018 hit 7-year high—that has driven prices up and depleted inventory.
Median home prices in Montreal Island are going back a decade and have jumped by 63%, it’s outpaced median income saw a modest increase of 9%. Predictable result is a young buying cohort which is unable to save for the down payments.
About 2 years ago, Canada Mortgage and Housing Corporation decided that the mortgages which are insured for more than $500,000 which is 10% down, and in an addition to disallow mortgage insurance for homes which are more than $1million.