On July 31, 2014 New CMHC (Canadian Mortgage and Housing Corporation) rules for properties worth one million dollars or more will take effect. The new rules will also effect loans used to finance the construction of multi-unit apartments.
The new rules mean that properties with a value or one million dollars or greater will no longer be insured by CMHC regardless of how large the downpayment is. Additionally, CMHC will no longer provide insurance for loans used to finance the construction of multi-unit appartments.
While on the surface this sounds like it is a blow to the Canadian housing market, the reality is in the Fraser Valley and Chilliwack the effect will likley be very marginal.
The reason for this is that mortgage insurance is not required for anyone putting a downpayment of at least 20% on the purchase of a property and very few people buying properties in excess of One Million dollars due so with less than 20% down. So this change will effect very few buyers and we would not expect it to have any noticable effect on the Housing market in the Fraser Valley or Chilliwack.
Addtionally, CMHC says no one has actually used the CMHC insurance on loans to finance construction of multi-unit buildings since 2011, so this change should not have any noticable effect on the market either.
Therefore we would expect that the new CMHC rules that come into effect on July 31, 2014 will have very little impact on the market, in the Fraser Valley.
As Always if you have any questions about this article, the real estate market or any other real estate questions please feel free to contact us we would be happy to talk with you. we can be contacted through this website or you can call us at 604-882-8384.
Mitten Real Esate Team.