{"id":4076,"date":"2016-11-23T15:15:59","date_gmt":"2016-11-23T23:15:59","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=4076"},"modified":"2016-11-22T17:56:38","modified_gmt":"2016-11-23T01:56:38","slug":"canadas-low-down-payments-are-harming-first-time-buyers","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2016\/11\/canadas-low-down-payments-are-harming-first-time-buyers\/","title":{"rendered":"Canada\u2019s Low Down Payments are Harming First-time Buyers"},"content":{"rendered":"<p style=\"text-align: justify;\">Canada has one of the highest homeownership rates in the world thanks in part to its low minimum down payment requirements, but Evan Siddall, president and CEO of Canada Mortgage and Housing Corporation (CMHC), believes those requirements may be contributing to the lack of affordable housing in some parts of the country.<\/p>\n<p style=\"text-align: justify;\">\u201cPoliticians are tempted to help first-time homebuyers enter the market, but low down payments may be part of the problem adding to affordability pressures and macro-economic vulnerabilities,\u201d he said last week during a speech at the Bank of England\u2019s offices in London.<\/p>\n<p style=\"text-align: justify;\">According to Siddall, in 1992 the Canadian government lowered the minimum down payment for first-time homebuyers from 10% to 5%; it then extended that benefit to all homebuyers in 1998.<\/p>\n<p style=\"text-align: justify;\">\u00a0\u00a0\u00a0\u00a0 <a href=\"https:\/\/www.roryc.ca\/blog\/wp-content\/uploads\/2016\/11\/low-down-payments-are-harming.png\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone  wp-image-4079\" src=\"https:\/\/www.roryc.ca\/blog\/wp-content\/uploads\/2016\/11\/low-down-payments-are-harming-300x131.png\" alt=\"low-down-payments-are-harming\" width=\"552\" height=\"241\" srcset=\"https:\/\/www.roryc.ca\/blog\/wp-content\/uploads\/2016\/11\/low-down-payments-are-harming-300x131.png 300w, https:\/\/www.roryc.ca\/blog\/wp-content\/uploads\/2016\/11\/low-down-payments-are-harming-768x336.png 768w, https:\/\/www.roryc.ca\/blog\/wp-content\/uploads\/2016\/11\/low-down-payments-are-harming.png 1024w\" sizes=\"auto, (max-width: 552px) 100vw, 552px\" \/><\/a><\/p>\n<p style=\"text-align: justify;\">Unsurprisingly, those adjustments sparked demand from homebuyers who would not have been able to enter the market under the original requirements. Now, however, the changes are creating problems, particularly for the first-time homebuyers who should be benefiting from them.<\/p>\n<p style=\"text-align: justify;\">Siddall believes that the \u201cextra demand\u201d that Canada\u2019s low down payment requirements have triggered are \u201csimply feeding higher house prices.\u201d And it\u2019s \u201cwealthier home sellers\u201d that are reaping the benefits, not first-time homebuyers. \u201cI have yet to be convinced that people in our country \u2018need\u2019 access to 19:1 leverage to buy homes,\u201d he said.<\/p>\n<p style=\"text-align: justify;\">He did acknowledge that there have been some changes since 1998. For example, when Justin Trudeau became prime minister at the end of last year, the country\u2019s new Liberal government increased the minimum down payment from 5% to 10% on the portion of home prices above $500,000.<\/p>\n<p style=\"text-align: justify;\">But for Siddall, \u201cthe objective of supporting housing affordability demands that CMHC explore a potential future path to higher minimum down payments.\u201d He also believes a loan-to-income limit should be explored.<\/p>\n<p><a href=\"http:\/\/news.buzzbuzzhome.com\/2016\/11\/canadas-low-down-payments-harming-first-time-buyers.html\" target=\"_blank\">CMHC : Canada\u2019s Low Down Payments are Harming \u2014 Not Helping \u2014 First-time Buyers<\/a> by Charlotte McLeod | Buzz Buzz Home<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Canada has one of the highest homeownership rates in the world thanks in part to its low minimum down payment requirements, but Evan Siddall, president and CEO of Canada Mortgage &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2016\/11\/canadas-low-down-payments-are-harming-first-time-buyers\/\">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":[9],"tags":[],"class_list":["post-4076","post","type-post","status-publish","format-standard","hentry","category-mortgage"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Canada\u2019s Low Down Payments are Harming First-time Buyers &#8226; 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