New Mortgage Rules Offer Temporary Relief but Leave Long-Term Housing Challenges Unresolved
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The new mortgage rules set to take effect in December 2024 aim to provide a short-term boost to the Canadian housing market by expanding 30-year amortizations for first-time homebuyers and raising the insured mortgage cap to $1.5 million. These measures are expected to improve access to homeownership for many, particularly in high-cost markets like Toronto and Vancouver. However, experts warn the impact may be limited, as increased demand could drive up home prices, countering affordability gains.
While these changes offer immediate benefits, such as increased purchasing power for first-time buyers and enhanced flexibility for higher-priced homes, their market-wide impact is expected to be modest. Only a small segment of buyers, particularly those with insured mortgages, will fully benefit. Additional measures, including exempting certain homeowners from the stress test and enabling refinancing for secondary suites, could support broader affordability and rental supply but are unlikely to solve systemic challenges.
Experts stress the need for long-term solutions to address affordability and supply constraints. Without significant efforts to boost housing starts and ensure a steady pipeline of new homes, the effectiveness of these policies may fade. Although these measures represent progress, sustained improvements require strategic investments in supply growth to stabilize the housing market over time.
Read the full article on: REAL ESTATE MAGAZINE
