How will the new mortgage rules affect the local real estate market?
On first glance it would be easy to assume that these changes will push buyers forward and create an earlier peak in the housing market just like we saw last year. However, the changes last year had more of an effect on first time home buyers and their ability to get a mortgage; last year not only was the amortization shortened, but the rules for get approved were changed (you have to qualify at the 5-year fixed rate even if you're taking a shorter term and/or variable rate). These changes had a noticeable impact on the housing market in Edmonton (and Canada) and we saw sales drop off right after the rules came into place.
This year the changes will have less of an impact on buyers entering the market, and more of an impact on existing home owners looking for re-financing and lines of credit. I don't believe these changes will create a significant impetus for buyers move their purchase forward. There are other, bigger influences at play in the area such as migration into the province, job creation and rising mortgage rates that will affect the housing market later in the year.
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