{"id":3614,"date":"2016-10-08T11:11:37","date_gmt":"2016-10-08T18:11:37","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=3614"},"modified":"2016-10-08T08:18:33","modified_gmt":"2016-10-08T15:18:33","slug":"bcrea-new-federal-policies-could-cut-home-purchasing-power-by-up-to-20","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2016\/10\/bcrea-new-federal-policies-could-cut-home-purchasing-power-by-up-to-20\/","title":{"rendered":"BCREA : New Federal Policies Could Cut Home Purchasing Power by Up to 20%"},"content":{"rendered":"<p style=\"text-align: justify;\">New mortgage rules introduced this week by the federal government cut first-time homebuyers\u2019 purchasing power by up to 20%, exacerbating affordability issues, according to a new report from the British Columbia Real Estate Association.<\/p>\n<p style=\"text-align: justify;\">One of the changes announced October 3 was to make it necessary for all homebuyers looking to secure a high-ratio mortgage to qualify at the five-year benchmark interest rate, even if they have been able to secure a lower rate with their lenders. Currently, if they are able to secure a five-year or longer fixed term, they only need to qualify at their discounted rate.<\/p>\n<p style=\"text-align: justify;\">The result is a drop in affordability, which will particularly hurt those who are looking to buy a home for the first time.<\/p>\n<p style=\"text-align: justify;\">\u201cHousing demand will slow as millennials, other first-time and early move-up buyers are squeezed out of the market,\u201d the BCREA said in a release. \u201cThis reduction in demand may cause imbalances and declining prices across some product types in some communities.<\/p>\n<p style=\"text-align: justify;\">\u201cIn addition, new home construction activity will lag along with related employment and economic growth.\u201d<\/p>\n<p style=\"text-align: justify;\">According to the BCREA, a family with a combined income of $80,000 will now only qualify for a mortgage of $405,000, assuming a 5% downpayment. Previously, it would have been able to obtain a $505,000 mortgage, so the policy change will mean a drop in purchasing power of $100,000 for this family. In a tight market such as Metro Vancouver\u2019s, this could mean this family is priced out of the market even for a condo, as the benchmark price for this property type was over $500,000 in September. This could affect many families in the region; according to Statistics Canada, the average family income in Vancouver was $76,040 in 2014.<\/p>\n<p style=\"text-align: justify;\">In another example, a family earning $120,000 will be able to qualify for a mortgage of $651,000 \u2013 down $152,000 from $803,000 prior to the policy change. This is assuming a 10% downpayment. This could price the family out of being able to afford a townhome, as the benchmark price for these homes was $677,000 in September.<\/p>\n<p style=\"text-align: justify;\">The BCREA said demand is likely to intensify, which will lead to rising prices in the future, \u201cas financially retrenched millennials buy up an undersupplied housing stock.\u201d<\/p>\n<p><a href=\"https:\/\/www.biv.com\/article\/2016\/10\/new-federal-policies-could-cut-home-purchasing-pow\/\" target=\"_blank\">BCREA : New Federal Policies Could Cut Home Purchasing Power by Up to 20%<\/a> by Emma Crawford Hampel | Business in Vancouver<\/p>\n","protected":false},"excerpt":{"rendered":"<p>New mortgage rules introduced this week by the federal government cut first-time homebuyers\u2019 purchasing power by up to 20%, exacerbating affordability issues, according to a new report from the British &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2016\/10\/bcrea-new-federal-policies-could-cut-home-purchasing-power-by-up-to-20\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"class_list":["post-3614","post","type-post","status-publish","format-standard","hentry","category-market-updates"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>BCREA : New Federal Policies Could Cut Home Purchasing Power by Up to 20% &#8226; Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.roryc.ca\/blog\/2016\/10\/bcrea-new-federal-policies-could-cut-home-purchasing-power-by-up-to-20\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"BCREA : New Federal Policies Could Cut Home Purchasing Power by Up to 20% &#8226; Rory C Real Estate | Oakwyn Realty\" \/>\n<meta name=\"twitter:description\" content=\"New mortgage rules introduced this week by the federal government cut first-time homebuyers\u2019 purchasing power by up to 20%, exacerbating affordability issues, according to a new report from the British &hellip; [read more]\" \/>\n<meta name=\"twitter:creator\" content=\"@RoryClipsham\" \/>\n<meta name=\"twitter:site\" content=\"@RoryClipsham\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Rory Clipsham\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2016\\\/10\\\/bcrea-new-federal-policies-could-cut-home-purchasing-power-by-up-to-20\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2016\\\/10\\\/bcrea-new-federal-policies-could-cut-home-purchasing-power-by-up-to-20\\\/\"},\"author\":{\"name\":\"Rory Clipsham\",\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/#\\\/schema\\\/person\\\/0672b9777e67473b9bd9247df49499c7\"},\"headline\":\"BCREA : New Federal Policies Could Cut Home Purchasing Power by Up to 20%\",\"datePublished\":\"2016-10-08T18:11:37+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2016\\\/10\\\/bcrea-new-federal-policies-could-cut-home-purchasing-power-by-up-to-20\\\/\"},\"wordCount\":387,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/#\\\/schema\\\/person\\\/0672b9777e67473b9bd9247df49499c7\"},\"articleSection\":[\"Market Updates\"],\"inLanguage\":\"en-CA\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2016\\\/10\\\/bcrea-new-federal-policies-could-cut-home-purchasing-power-by-up-to-20\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2016\\\/10\\\/bcrea-new-federal-policies-could-cut-home-purchasing-power-by-up-to-20\\\/\",\"url\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2016\\\/10\\\/bcrea-new-federal-policies-could-cut-home-purchasing-power-by-up-to-20\\\/\",\"name\":\"BCREA : New Federal Policies Could Cut Home Purchasing Power by Up to 20% &#8226; 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