New government regulations could slow the Calgary housing market and make it more difficult for first-time homebuyers to find a house. The Canadian government recently issued tighter lending rules aimed at buyers who need to purchase mortgage insurance. Mortgage insurance will no longer be allowed for 30-year mortgages. Instead, buyers will either have to get a shorter term mortgage with a higher monthly payment or make a larger down payment so that they can get a 30-year mortgage without insurance. The government will also cease to offer insurance to people buying homes which cost more than one million dollars.
The modifications are designed to prevent home buyers from spending more than they can afford. Currently, the average sale price for a single-family home in Calgary is $479,000. The new rules will either reduce home prices or force first-time home buyers to wait longer before buying their first house. Currently, Alberta has a strong local economy. The number of homeowners behind on their mortgages has hit its lowest point since 2009. Lawmakers expect the new rules to have a much greater impact in Toronto, Montreal, and Vancouver than in Calgary.