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Ottawa delivers sucker-punch to Canadian housing markets

In a move that seems to have taken many by surprise, in spite of repeated warnings that Canada’s housing markets are overheated and debt obligations of Canadians are too high, finance minister Jim Flaherty announced the fourth round of mortgage rule changes, likely more significant than the three rounds that came before these.


Effective July 9, thirty-year amortizations are off the table as the maximum period to retire your home loan is reduced to 25 years. According to the Canadian Association of Accredited Mortgage Professionals, 40% of real estate transactions that required a mortgage since 2011 were amortized over 30 years. The net effect for those buying in this way is similar to a near-full percentage point interest rate increase and is likely to knock a few entry-level home buyers out of the market.


Other changes include the elimination of mortgage insurance options for buyers paying in excess of $1-million dollars for a home, a lowering of the maximum amount that a home owner can refinance to 80% of the home’s value, and the firming up of some maximum total debt service ratios for home buyers.


In a news release put out yesterday from the minister’s office, Flaherty said, “The adjustments we are making today will help [households] realize their goals, build on the previous measures we have introduced to keep the housing market strong and help to ensure households do not become overextended.”


Is Canadian housing down for the count? I’m not sure, but I think the next few weeks are bound to be brisk.


I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.


Norm Fisher

Royal LePage Vidorra

Norm Fisher, Author of the TeamFisher Saskatoon Real Estate Blog

About Norm

Licensed in 1993, Norm brings a wealth of experience to TeamFisher. He has worked in every imaginable capacity including sales agent, office manager, team leader, broker and now, broker/owner. Norm has written a weekly review of the Saskatoon real estate market for more than 650 consecutive weeks which may make him the most consistent industry blogger in the world.Less...

Licensed in 1993, Norm brings a wealth of experience to TeamFisher. He has worked in every imaginable capacity including sales agent, office manager, team leader, broker and now, broker/owner. Norm has written a weekly review of the Saskatoon real estate market for more than 650 consecutive weeks which may make him the most consistent industry blogger in the world.

Norm is known for his passion for technology and can most often be found exploring and experimenting with the next big thing in real estate marketing. He was the first Saskatoon real estate agent to promote a home online and has been an early adopter of new technologies ever since. “Everything about this business has changed over the past 20 years, and it will happen again in the next ten. An open mind and a curious attitude are all that’s needed to continue to find new ways to serve our clients by delivering a faster, smoother, worry-free transaction,” says Norm.

In his spare time, Norm enjoys Crossfit and cycling, some years accumulating over 2,000 kilometres on the road. He’s a strong supporter of the Royal LePage Shelter Foundation and enjoys raising funds by joining fun, fitness-related initiatives like the Grouse Grind for Shelter. In 2015, he trekked the Peruvian Andes to Machu Picchu. In 2017 he walked the southern highlands of Iceland across mountains, sand, snow, ice, lava fields and forest for seven days. Collectively those initiatives raised over a million dollars for Canadian women's shelters.
 

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