It’s going to be harder for Millennials to enter Metro Vancouver’s already frothing housing market.
That’s the message from the B.C. Real Estate Association.
This comes after the federal government introduced new policies requiring borrowers to be able to meet higher interest rates.
The federal government announced last week, all home buyers securing insured mortgages would have to qualify for the five year bench mark rate.
Chief Economist with the association Cameron Muir says Millennials will bear the brunt of the new policy, impacting purchasing power.
“When we look at it from a practical perspective, a homebuyer who can qualify at five per cent down for a home at around $500,000 today, will after October 17, will only qualify for about $400,00 dollars. So that’s a huge hit in their purchasing power.”
Muir says many millennials will delay buying a home, adding employment can be a decision maker since most like to be close to work.
He expects the younger generation to stay in rentals or stay at home with their parents.