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A real estate expert believes the new mortgage rules that went into effect Monday will hit Alberta's market the hardest.
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The changes are meant to make it tougher for buyers to qualify if they put less than 20 per cent down." ~6 ], [% H W5 j& H
6 c6 A2 H4 |0 bPrior to today, an Alberta family with a household income of $80,000 would likely have qualified for a $400,000 home but now they will be approved for a $320,000 home." Y, f7 u* Q. U% u; ~# M. L8 \
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First-time buyers, single-income earners take biggest hit with new mortgage rules
+ q+ Y2 J$ ^) w3 f. ~6 {CMHC to issue 1st 'red' warning on Canadian housing market
6 c+ s$ d2 o7 R. |Mortgage specialist Peter Kinch says under the new rules, affected buyers have about 20 percent less purchasing power which will put a downward pressure on the Canadian real estate market but he says the impact will be even greater in Alberta, where the slumping economy is already hurting house sales and prices.
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: z3 u2 j6 H' {# r# F"In a real estate market that's struggling to recover already, it could have a very negative impact on that market," Kinch said.$ N1 U7 M% ]" V" q q) [% F
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Wait and see what happens
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Natalie Whitney and her young family say that's what they're banking on so they've just decided to put their house hunting on hold.- U8 L* a" T9 E5 r' S; V
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"It could be advantageous for us to wait and just see what happens to the market in six months," she said.* Z" A6 ~$ N4 X' W5 J5 t3 C9 ^" n+ {
4 c& x! }. M9 {# w% D8 m! yThe Canada Mortgage and Housing Corp. issued its first ever "red" warning on Monday, referring to real estate affordability issues spreading beyond Vancouver and Toronto.
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"These factors will be reflected in our forthcoming Housing Market Assessment on Oct. 26. They will cause us to issue our first "red" warning for the Canadian housing market as a whole," CEO Evan Siddall wrote in a Globe and Mail column.
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Kinch says for buyers who can't wait, they'll either need to come up with a bigger down payment or lower their expectations about what they can afford. |
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