Instead of slowdown in winters, Ottawa real estate agents experienced spike in sales over past 2 months as the homebuyers rushed to seal the deals ahead of the new mortgage rules that have been kicked in Jan 1st.
New Ottawa rules put mortgage stress test in Ottawa Real Estate Market on some uninsured homebuyers that put more than 20% as down payment on next home. This test assures bank which borrowers may able to make mortgage payments if interest rates get climbed. Ottawa City Guide (Waterfront Cities Book 11)” rel=”noopener” target=”_blank”>A Guide on Ottawa City is available online which is very helpful to know more about Ottawa.
According to Ottawa Real Estate Board i.e OREB, around 1,239 homes were sold out in past November, an increase of 25% over same period of time in last year. Average sale price of a home in that period was $418,354.
Frank Napolitano, Managing Partner at Mortgage Brokers Ottawa said that there is no question in Ottawa Real Estate Market that they got bump since the stress test. He bet to have increased in business by around 15%.
2nd, 3rd-time homebuyers are most affected
On Jan. 1, 2018, all of the homebuyers will qualify at rate which is negotiated as part of the mortgage contract with 2% or average of 5 year posted rate of 4.89% which is higher.
Majority of people calling Napolitano are 2nd and 3rd time homebuyers who are much worried that they will no longer to buy bigger property as they wanted. A Complete Taxation Guide to Canadian Real Estate Investing which help to know that How to Maximize Your Real Estate Portfolio and Minimize Tax.
Napolitano said people are much impacted as ones are trying to go at the up level in Ottawa Real Estate Market. They are going from townhouse to single house and are having to spend around $100,000 or more that.
According to Napolitano, brokers have been stress testing the customers that ahead of new rules and found that 10% of all of them not pass out stricter rules.
“They are all disappointed, but feel that they can work with lower amount, but this only means that they have to give up something in next home.”
Real Estate Market expected to cool down
Ralph Shaw, OREB president said that agents who work in his office on Boxing Day just to close the deals. But along with tougher regulations around the corner, he expects that local real-estate market will get cool down in 2018.
Shaw said that average home price in Ottawa is nearly $450,000, but he warned that stress test will affect on sales in luxury market.