These are the most confusing times and many wonder what's next. Coming this summer, you will see a lot of changes by CMHC, BOC and Federal in the Housing and Lending market in Canada
Home prices could fall from their peak by 9% to 18% over the next year
Canada Mortgage and Housing Corporation (CMHC) President Evan Siddall made comments to the House of Commons Finance Committee, warning committee members that average home prices at the national level could fall by 9 to 18 percent over the next 12 months. The recovery might happen over mid of this decade.
Min Down payment might rise to 10% from 5%
On an average if a person buys 300,000 home with 5% down payment, intends to loses more than 15% of his investment if the home prices goes down by 10%. This all account and factors the insurance and other costs relates to their home purchase.
Qualifying Rate will come down to 4.94%
The Bank of Canada 5 years benchmark qualifying rate will come down to 4.94% effective this 25th May 2020
“The resulting combination of higher mortgage debt, declining housing prices and increased unemployment is cause for concern for Canada’s longer term financial stability,” Siddall said.
This, according to Siddall, could put new homeowners in an especially precarious position since they have relatively little equity in their homes and are now facing potentially significant price declines.
“As much as one fifth of all mortgages could be in arrears if our economy has not recovered sufficiently,” he added.
So, if you ask me "Is it the right time to buy?" Yes, it is. There are few basic formulas you have to work on and keep it simple.