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Selling Sooner Rather Than Later May Save You Thousands.

Selling Sooner Rather Than Later May Save You Thousands of Dollars!


The craziest real estate market in Canadian history has received the attention of experts globally, and now the Canadian Bank Regulator (OSFI). 2017’s real estate roller coaster proved once again that Canadians appreciation for home ownership, at any price, had no limits.


Have we reached the peak? The Canadian Bank Regulator (OSFI) seems to think so! Regulations put in place in 2016, designed to slow things down, did not have the desired outcome. Buyers of all classes simply found ways around the rules. As of August 2017 insured mortgages (CMHC) were down 40.5 per cent in the 12 months since they were subject to the 2016 stress test, while uninsured mortgages grew 17.3 per cent. This is why the Canadian Bank Regulator felt compelled to act once again


The new stress test is designed to simulate a borrower's financial situation by assuming they would have to pay back the loan at the posted average. Under OSFI's new rules, borrowers would be stress tested at either the five-year average posted rate, or two per cent higher than their actual mortgage rate — whichever one is higher. Financial experts expect an initial rush of buyers before the January 1st 2018 deadline, after which sellers will have to bear the burden and make up the difference if they want to sell.


In 2017, where the average single detached home in the City of Barrie is $535,000, a buyer in 2018 will be approved for $85,000 less of a mortgage. Since it’s not likely the average buyer could come up with the extra down payment amount required, sale prices will, over time, be adjusted lower to reveal a new average selling price through 2018 of approximately $450,000/$500,000.


Without a doubt, the ride up for now is over. By the time prices begin to recover 2-3 years from now, home sellers will have ample competition from new home builds in the south east and west corridor of Barrie, where there will be an expected explosion in population in the new Innisfil/Barrie City annexed lands. Approval for thousands of new build homes are already underway.


If you’re considering selling your home within the next 6-12 months, selling sooner rather than later might just put tens of thousands of extra $$ into your bank account.


Plan ahead! Don’t hesitate. To find how this might affect you or for more facts, figures or detailed data, you can reach me at edtracy@me.com or direct 705 796 6348.


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