Young Families are Once Again a Collateral Damage!
Tuesday Oct 04th, 2016Share
Yesterday, there was so much media fanfare about imposing a capital gain tax on the non-residents that almost no one gave a deep thought about much more important implication of the Fed's announcement of "regulating" the housing market in Canada.
The Department of Finance is "proudly adding" one more layer of the regulation to impede the first-time buyers (specifically young families with small kids) to ever qualify to buy their own properties in Canada.
The two big changes coming to Canadian Mortgages in the last quarter of 2016:
1) Effective October 17, the qualification rate will now apply to all insured mortgages (even high- and low-Loan-to-Value 5-year fixed terms).
2) Regulators are banning a wide array of mortgages from being insured, effective November 30.
I was too naive to hope that our government would think twice before changing mortgage rules affecting the most vulnerable, but the most important segment of our economy. The young families! Unless the government has hard data proving that the first-time buying young families are over-heating the real estate market, there is no wisdom in changing the mortgage rules.
I am proudly representing many of the first-time buyers who are already struggling to save for higher down-payments on extremely high #GTAproperties. These families have almost no debt, solid jobs and... young kids. On the top of high housing rental costs, insurance costs, pension and education investments and, of course, challenges raising kids in the urban setting, they are barely able to save couple of hundreds of dollars for the down-payments.
These families are not foreigners with hundreds of thousands dollars to park cash, they don't have rich relatives willing to help them with the down-payments, and they don't have a baby-boomer grandparent who can sell his/her enormously appreciated property for millions to help them.
These are families with university degrees, with great skills and solid work experiences. They are me and they are most likely you, and we all need to be outraged!