It’s a change designed to help cool the housing market in Canada’s biggest cities and it will certainly have an impact in Metro Vancouver.
The Federal Government has announced it is increasing the down payment needed on homes over $500,000.
Finance Minister Bill Morneau says people buying homes for more than $500,000 will now have to put 10-percent down on the portion of the price over that half million dollar mark.
Anything under $500,000 will still only require a 5-percent down payment.
“We believe that by increasing the down payment in the $500,000 to a million dollar mark, we will create a greater buffer for people and make people more secure, and have the entire market be more stable.”
Morneau says the move will only impact small minority of homes in Canada, because homes sold for more than $1-million already require a 20-percent down payment.
That means the changes will do little to calm concerns about foreign buyers, who statistics show tend to purchase luxury homes.
Metro Vancouver impact
The BC Real Estate Association’s Chief Economist Cameron Muir says the down payment changes announced today will have a marginal impact.
“That’s about 35 to 36-percent of home sales in Metro Vancouver right now are between that half-a-million to million dollar range.”
Muir says the changes will impact real estate attainability.
And while it won’t affect first time home buyers overall in the region who tend to purchase properties below $500,000, Muir says it will keep some people out of the real estate market.
“For buyers who are looking to get into their first home in the City of Vancouver, it’s going to be much more of a challenge.”
That is because there just isn’t much inventory selling below $500,000 in the city.