Some major changes have happened in the last month as it pertains to real estate, so as a potential investor or future homebuyer, we want to keep you informed on what this all means for the outlook of the real estate industry in Calgary, Airdrie and Alberta. First, let’s look at the most recent news in real estate.
New mortgage rules
On Monday, October 17, new mortgage qualifying rules took effect in Canada. Under the new regime, a stress test for all insured mortgage applications (less than 20 per cent down payment) is now required, to ensure the borrower can still pay their loan if interest rates or personal financial situations change. Until now, stress tests were not required for fixed-rate mortgages longer than five years.
These changes will make it tougher to qualify for mortgages if buyers are putting less than 20 per cent down. However, financial experts say this is overall a good thing for both the economy and housing industries, to cool overheated markets. =
“Affordability pressures hurt lower-income households the most and cause real socioeconomic consequences. Action was needed.” [Globe and Mail]
Interest rate holds steady
The Bank of Canada announced this week that the benchmark interest rate is being kept at 0.5 per cent, which was expected. However, this means rates will stay low for quite some time. Stephen Poloz, Bank of Canada governor, says we should expect rates to stay unchanged throughout the year with likely the earliest possible move not until 2018.
As an investor, what’s the outlook?
Data obtained from various Alberta and Calgary studies have led us to expect a strong stable economy and housing market in our core development areas. Land supply is expected to tighten in the CMA, and as it does, we believe integrated land developers and homebuilders will have a competitive advantage.
As an integrated developer with a strong land base of around seven years of development inventory for single-family home building, Genesis offers strong future potential.
Genesis Land resources for investors:
- Genesis Land stock performance
- Genesis Land reports and filings
- Genesis Land corporate presentations
Other real estate resources:
If you have questions regarding investing with Genesis Land, please contact us.
