High–End Homes in Canada Face a Decline in Demand after New Mortgage Rule is Implemented
The CEO of Syndicate Mortgages, Marcus Arkan, sheds light on the after effects of the change in mortgage policies on high-end homes in Canada.
Ottawa (PRWEB) October 24, 2012
The changes that were enforced on the Canadian real estate mortgage policies in June this year have chilled down the housing market in major cities of Canada. The decision of the federal government to reduce the amortization period on government insured homes from 30 years to 25 years has taken a toll on the demand of the entire housing market, specifically the high-end luxury homes.
The vice president of economics at the Bank of Nova Scotia, Patricia Mohr, said, “The gap has widened between what buyers are willing to buy at and what sellers would like to sell at, so the transactions are slowing because of that.”
Many families are now unable to meet the stricter mortgage requirements and either delay buying a house or get unsecured credit from other sources for high interest rates damaging their credit score, as a result.
The new mortgage rules have slowed down the high-end luxury real estate market because of which construction of such homes has also decreased. The cooling real estate market of Canada is therefore, having an overall cooling affect on the economy and the people.
Mark Carney, the Governor at the Bank of Canada, believes that the implementation of new rules will tame the mortgage market in Canada and also provide long-term financial stability as well as security against various economic risks.
CEO of Syndicate Mortgages and mortgage expert, Marcus Arkan said, “This move will decrease inflation in the current real estate market of Canada, especially in cities like Toronto, Vancouver and Montreal.”
Mr. Arkan completely agreed with the comment made by Ms. Patricia Mohr and said, “The rapid drop in the demand for luxury homes, following the implementation of the new mortgage rules, has not just pushed buyers back, even potential sellers are now unwilling to sell their properties at reduced prices and are ready to wait for a better time”.
The change in mortgage policies has been an attempt to reduce the increasing real estate debt burden on the economy and reduce the ratio of debt to income. Even though, they have affected the luxury real estate market negatively, the new policies have, to a certain extent, softened housing prices and helped ward off another real estate bubble.
About Syndicate Mortgages Inc.
Syndicate Mortgages Inc. is one of the leading Canadian mortgage brokerage firms. Founded in 2008 in Ontario, the company specializes in residential, commercial and construction financing across Canada. With years of experience and expertise in the mortgage industry, and access to an array of lending institutions across Canada, Syndicate is known for finding the best mortgage rates for their customers. Syndicate has branch locations across Canada. For contact, please use the following details.
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