“We do expect this to cause some slowing in demand but not a significant amount,” Calgary Real Estate Board chief economist Ann-Marie Lurie told CBC News.
Lurie added, however, that the shrinkage in demand will likely be offset slightly by various factors, including an improving economy and a growing supply of new homes across several price ranges.
Read more: Alberta’s metropolitan markets reaping the fruits of economic recovery
Hopeful home owners will now have to undergo a stress test that would determine if they can fulfil their payments at either the Bank of Canada’s 5-year average rate, or 2 percentage points higher than what they’ve negotiated with their lender, whichever is higher.
The changes would compel some prospective home buyers to settle for lower-cost options such as condos or townhouses. First-time buyers may also have to delay making large purchases to raise the larger down-payments needed for their desired homes.
“If they were thinking they could get a $500,000 home and now they can no longer get that, they’re going to have to consider all their alternatives,” Lurie stated.
Edmonton commercial market’s prospects brighter – analyst
Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate
With OSFI’s new mortgage stress tests having taken effect at the beginning of the year, housing demand in Calgary is projected to decline, according to observers.