2016 Was a Year of Unprecedented Government Intervention.

2016 Financing Changes -Year in Review

1.  Spring of 2016, BC Government imposed a restriction on the assignment of contracts for the resale of properties intended to reduce the number flipped properties by assignment, ie before closing.

2. New CMHC qualifying criteria for low down payment mortgage insurance, a down payment increase for properties over $500K. 5% down payment is now only up to $500K and 10% down up to $1M maximum for CMHC insurance.

3. The introduction of a 15% foreign buyers Tax implemented in August 2016.      Amended Jan 30 2017; Levy lifted for those who have a work permit and pay taxes in BC.

4. Federal mortgage rule changes in October. A new borrower stress test criteria was set for buyers with less than a 20% down payment. Now both Variable and Fixed rate mortgages must qualify at the higher Bank of Canada rate meaning less borrowing power for the consumer.

5. Fall 2016, the city of Vancouver introduced the Empty Home Tax affecting investors. Effective Jan 1 2017, empty homes are subject to a tax of 1% of the property's assessed value.

6. December 2016, the BC government announced a 5% first-time buyer down payment, interest free and payment free loan for 5 years which took effect on January 16   2017.

The BC Home Partnership program will meet the buyer's contribution up to 5% of the home's purchase price, to a maximum purchase price of $750 000.

Forecast for 2017; Stay Tuned, More Regulation to Follow,,,

The government says it plans to shift some of the risk of defaults against insured mortgages to banks and other lenders. I suspect banks will compensate by increasing interest rates.

Stay tuned as both the US and Canada settle into the new economic reality unfolding as the TRUMP Administration's affect on the US economy and the US Federal Bank evolves.

The Future is Created by the Bold.

Be Bold !

Rick Genovese