Winnipeg Homebuyers Faces Consequences Of New Mortgage Rules

Potential buyers in Winnipeg will have to face the impact of the “stress test” designed to assess credit worthiness of borrowers in terms of mortgage payments. The rates posted by the big banks were averaged at 4.64 per cent.

Before the law came into effect, most were able to buy homes and get a mortgage with a downpayment, but it seems like the rules have changed and it will greatly have a great impact on buyers.

For those buyers that are looking at getting a home with a price range of $300,000 will have to reconsider their expectations and might not have the opportunity to afford some certain homes in specific areas. The adjustment was done to have the over-inflated markets in places like Toronto and Vancouver cool down, but it seems like other minor markets are suffering at the expense of the other housing markets. Jolicoeur said; “It affects all areas. In Saskatchewan, Manitoba, Ontario, parts of Quebec, [the new buyers are] going to be suffering because it affects them,” he said. “This came very sudden, very short notice. The law was passed three weeks ago and it’s [already] effective.”

It’s not news to us that the market in Winnipeg is nothing compared to other blazing hot markets, listed homes get potential buyers while the markets remain cool and strong. The rules should have been more targeted at the bigger markets, regarding Winnipeg, Geoff Archambault said; ‘There’s a lot of uncertainty, and when there’s uncertainty, that causes a lot of issues. It’s not overheated like the government is saying it is. They are doing a one-size-fits-all approach. We’re not Toronto and Vancouver here, and we’re really concerned that’s going to hurt our local markets.”

Those that are buying their first homes will be struck by this rule greatly and will have no other choice than to continue renting or seek help from other family members to have them assist financially with their a home. Geoff said; “If someone just sold a house maybe three or four weeks ago before these rules came out, now when they go to get a new house, they probably can only afford the same home that they just sold. They were hoping to upsize and get a bigger home; now they can’t get that bigger home because they have to qualify for a lot higher interest rate.”

A word of advice from Archambault to those looking to buy homes is to make sure their credit scores are kept high as possible and avoid spending heavily for the mean time. For the sellers, they will have to have their prices lowered for the homes due to the condition which doesn’t favor anyone. He said; “There’s a lot of uncertainty, and when there’s uncertainty, that causes a lot of issues. We’re really going to have to watch how we’re pricing homes now. Things are going to change probably on a monthly basis now. Something might sell this month but next month, if it slows down, even more, it might have to go a little bit less and be priced a little more [aggressively].”