Recently the federal government announced more changes to the mortgage market. The most significant change appears to be requiring buyers to qualify for payments based on the posted, rather than discounted rate. This is equivalent to having to qualify to afford payments at about 2% higher than a buyer would pay for over the course of a standard five year term.
The Calgary market remains fragile during year two of our cyclical recession. This market lacks the speculative fervour and foreign investment of the two biggest markets in the country. In fact sales and prices have been down for 22 months, not exactly indicators of a market needing government meddling.
If the Feds were concerned about housing affordability they would actually tackle the gst bracket creep issue. This long overdue change would make buyers eligible for gst rebate on new homes. Instead the central banks own inflationary weak dollar policies have led to the higher sticker prices we have on real estate today. Now even entry level housing is too costly to qualify for gst rebates.
The massive tax grab on new housing is so typical of how hypocritical our government operates. On the one hand they feign concern at prices getting too high in some markets yet at the same time they benefit from the higher prices by taking 5% of every newly built home. Maybe the government should just get out of the mortgage financing and insurance market and allow the market to set interest rates. This would be a lot more effective than setting national policy based on what happens in Toronto.