THUNDER BAY -- Thunder Bay realtors watching for the impact of mortgage rule changes on the local market will likely have to wait well into 2017.
The president of the Thunder Bay Real Estate Board, Diane Erickson, said it could take some months to determine how changes in down payment requirements will affect buyers and sellers.
Last week the federal government announced an increase in the minimum down payment for higher-priced homes, starting in February. Currently, a precondition for Canada Mortgage and Housing Corporation insurance on mortgages is a minimum five per cent down payment when the mortgage is worth more than 80 per cent of the home's value.
Next year, the down payment goes up to 10 per cent on that portion of an insured mortgage of over $500,000, but remains five per cent for the initial portion.
Erickson said at this point it's difficult to predict how the change will play out in the city.
"I'm not 100 per cent sure it will impact us to the extent (it will) in the larger urban areas."
She said the effects will be seen both "in the buying end and the selling end, because it will affect the sellers too."
Erickson feels people entering the market for the first time stand to be impacted in particular.
"If we look at first-time home buyers, it probably will affect the affordability ... What they were able to afford previously will be reduced."
She said these people will be looking at a lower purchase price than what they originally had in mind. "It's roughly about a 20 per cent decrease in what they can afford."
Erickson added "years ago, the banks did this, then they quit doing this, and now CMHC is putting it back in," noting that the goal is to protect buyers by ensuring that if interest rates increase, they can still afford the payments.
