They say good news comes in threes. I don’t know if that’s true or if it’s from the same school of science as astrology, but it happened this week with mortgages.
First, Ottawa announced a bombshell loosening of mortgage insurance rules. Second, inflation stunned economists by undershooting the two per cent target. Third, the United States Federal Reserve threw a party for the markets with a jumbo rate cut.
All of the above went down in the short span of 75 hours.
Here’s a quick peek at how this trifecta of bullishness could awaken Canada’s real estate market.
Out of nowhere, the government decided that Canada’s default insurance market needed stimulation. Starting December 15, for those seeking insured mortgages, the government will allow:
The first measure corrects the fact that value limits on insured homes haven’t kept up with the 76 per cent surge in home values since the rule was instituted.
The second measure creates a more liquid pool of buyers for new homes, incentivizing the construction Canada desperately needs.
The third change levels the playing field for first-time buyers who don’t have down payment assistance from their families.
All of these initiatives help put young voters into homes sooner. But far be it from me to be cynical and assume that desperately clinging to power by wooing disenfranchised homebuyers was in the government’s playbook. I’m sure it was just a fluke that every housing policymaker I’ve ever spoken to in the years leading up to this move was staunchly against such measures for fear of creating further imbalance in the housing market.
In any case, while one can debate the pros and cons of these policies, what’s undeniable is that the mortgage and real estate industry just hit the
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