The Liberals came into power having promised more affordable housing to Canadians. Their exact words were “We will make it easier for Canadians to find an affordable place to call home.” As we all know now this was a mere platitude to attract votes and the reality is that they have made it more difficult for the average Canadian to afford a home.
Shortly after assuming power they moved to tighten lending rules for homes worth more than $500,000 when they raised the minimum down payment requirement. This happened in December 2015. The following year, in October 2016, they announced several major changes to mortgage rules. For example, all high-ratio insured mortgages must qualify for mortgage insurance at an interest rate equal to the Bank of Canada’s five-year fixed posted rate (or their contract mortgage rate whichever of the two is higher). In practical terms this effectively reduced how much money a consumer could qualify to borrow when applying for a mortgage. A month later they applied this to low-ratio insured mortgages as well. They also required the sale of a principal residence home to be reported to Revenue Canada.
A year later they announced more mortgage rules that came into effect on the 1st of January 2018. More stringent guidelines were applied to all Canadians who apply for a mortgage through a federally regulated mortgage lender. All borrowers now have to qualify for mortgages that are two percentage points higher than the rates that they are applying for. The Fraser Institute states that these new rules are both unnecessary and harmful to homebuyers. Nevertheless the government went ahead and made it more difficult for Canadians to get a mortgage.
In addition to these rules the Trudeau government has raised income taxes and is in the process of introducing another new tax on all of us. This carbon tax and the tax increases will take even more money out of our pockets. Add these changes to interest rates that increased on the 17th of January (and are expected to continue to go up in 2018) and homes have now become more unaffordable – the opposite of what Trudeau promised to Canadians.
So what do Comox Valley homebuyers do? Perhaps what is commonly referred to as a mortgage helper may help you buy what you need. Homes with suites and homes with secondary carriage homes on the property are becoming increasing sought after as a way to help pay the bills.
If you consider the purchase of a homes with suites in Comox or Courtenay make sure that the suite is permitted by the local municipality. For homes with carriage homes ensure that the secondary residence is allowed by the local zoning bylaw. If you find that they are not and you buy the home you may be in for a real surprise if they are ordered to be removed by the local municipal authorities.