Canada Mortgage and Housing Corporation released The State of Homebuying in Canada report on November 15, 2019, with a few key findings, including this headline.
The annual State of Homebuying in Canada report noted that 56% of all purchasers were first time buyers in 2018. This dropped to 47% in 2019.
The tightening of mortgage rules which has been taking place over the last 4 years is certainly having an effect. The never ending rule changes were intended to slow home sales and prices. But like most government interventions, its had the opposite effect.
Fewer first time home buyers are now able to qualify. They aren’t alone. Private investors, or people owning a second or third property, are also finding it much more difficult to qualify for a mortgage.
The end result is fewer rental units available and record high rents. Canadians are motivated to buy but cannot qualify. They also cannot afford to rent because, in most cases, monthly rents are higher than a mortgage payment.
Well done Federal Government of Canada!
Ok, that’s the bad news. Now for the good news; there are financial institutions still interested in lending money to qualified borrowers. If you’re taking the time to read this, then this means you! Mortgage brokers have seen a huge increase in calls from home buyers. 36% of buyers consulted a mortgage broker in 2018 compared with 49% in 2019. This makes sense as the mortgage rules have become more complex and confusing to purchasers.
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Steve Garganis: 416-224-0114; firstname.lastname@example.org
As an industry insider, Steve will share info that the BANKS don't want you to know. Steve has appeared on TV's Global Morning News, CBC's "Our Toronto" and The Real Life TV show. He's also been quoted in several newspapers such as the Globe and Mail, The Toronto Star, The Vancouver Sun, The Star Phoenix, etc.