October Market Update Part 2 – Regulatory Changes
I have divided my Market Update this month into two segments because there was just too much to talk about in one post.
As I mentioned in my previous post, the Ottawa real estate market is stable, leaning towards a buyers market as inventories get up over 3 months. However, the Federal Government has taken some fairly solid steps towards supporting the housing market in the past month, and this is likely to affect the market going into the fall. These new announcements are especially good news for you if:
- The home you are selling is likely to sell between $1m and $1.5m.
- Your home is suitable for adding a secondary suite, or conversion into rentals.
- You are looking to buy new construction.
Just in the past 30 days, the federal government has made several important announcements:
On Sept 16th, the Federal government introduced two significant changes to the mortgage rules.
- Increasing the cap for insured mortgages from $1M to $1.5M. This means that buyers will be able to purchase houses up to $1.5M with as little as 5% down. This should increase demand in the $1m to $1.5m price range – a good thing for downsizers who have homes in that price range.
- Expanding eligibility for 30 year mortgage amortizations to all first-time homebuyers and to all buyers of new builds. This means that first time homebuyers and new build homebuyers will be able to take advantage of 30 year mortgages and the lower monthly payments associated with them.
These changes are likely to stimulate demand for properties in the $1m to $1.5m range. And it will also make it easier for those downsizers who are looking to downsize into new construction townhouses and condos.
Then on Oct 10th, they released even more changes aimed at facilitating the building of secondary suites in residential homes:
•Changed the mortgage rules for secondary suites, enabling homeowners to build secondary suites in their houses and refinancing the construction and their homes up to 90%.
•Increase the mortgage insurance home price limit to $2 million for those refinancing to build a secondary suite.
These changes are likely to stimulate investor demand in single family properties that can be modified into rental units or improved with secondary suites, especially larger homes and ones that might need a significant amount of work.
If you are interested in knowing more about these changes and how to take advantage of them, feel free to give me a call at 613-614-3376.
Best,
Chris Hendricks, J.D., REALTOR®, Real Estate Broker
P.S. If you are thinking of selling your home in the next year, it’s important to know what your home is worth so you can budget and plan. Click here to get a free, no-hassle estimate of what your home is likely to get in today’s market.
Sources:
