Marnie Bennett: Slow Growth of Real Estate Market Caused by Updated Mortgage Regulations

OTTAWA, Nov. 7, 2012 /PRNewswire/ -- The latest changes to mortgage regulations in Canada have attracted a great deal of attention, as they coincide with a slowdown in the industry. Marnie Bennett and other noted real estate professionals believe that the changes to mortgage guidelines have contributed to the slower growth of the market, as they have made it more difficult for first-time homebuyers to secure funding. Calgary Herald explains how these new regulations have altered the trajectory of the market—and how some parts of the country have managed to avoid the effects of the slowdown.

According to the article, Toronto and Vancouver have felt the effects of the new regulations; however, the article asserts that Calgary is one area of the country that has not seen a drastic change in its real estate activity. Bennett asserts that Ottawa, too, is still experiencing a healthy rate of real estate transactions. In fact, she notes that there is a shortage of new homes to offset the growth of the city and that, in Ottawa, more resale homes have been bought in 2012 than in 2011 despite an increase in price by an average of $12,000.

Laura Parsons, who is a mortgage expert at BMO Bank of Montreal, states: "In Calgary we are really seeing a nice balanced (housing) market. With the changes, what it does, like it has done every single time there's a change, people that were sitting on the fence think they can no longer get engaged into homeownership. A lot of people are feeling like it's a bigger change than what it is. As an example, it's about $50 per $100,000 going from 30 to 25 years (amortization) to a person's mortgage payment. When we put it into perspective it kind of makes them feel a little bit better. And when they see the interest savings, it's huge."

Marnie Bennett adds that, in Ottawa, the affordability of condominiums and other forms of housing has contributed to a largely stable market. "Condos are more affordable than single-family homes, and they are often more practical for first-time buyers," Bennett asserts. "Because condominium living offers a less expensive form of luxury to single buyers, young couples, and even empty-nesters, first-time buyers often find themselves considering the ways in which they will benefit from purchasing a condominium rather than a single-family home or townhome."

Bennett understands that the nature of the real estate industry requires it to fluctuate, and that this slowdown in sales is due, largely, to the legal changes regarding home purchases rather than to a weakened market or economy.

ABOUT:

Marnie Bennett is the marketing consultant for Bennett Property Shop Realty, a full premium service real estate brokerage specializing in marketing and selling new and resale homes, condominiums and investment real estate. Marnie is the host of the weekly radio show the Real Estate Hour, a millionaire real estate investor and a wealth management coach. For additional information visit www.bennettpros.com.

SOURCE Marnie Bennett