Greetings! Welcome to the WRX Property Group website and blog. With the first month of 2018 receding into the rear view mirror, and February well upon us, it’s time again for our Monthly Market Report.
There are two things to make note of right off the bat, each of which is having an impact on the month’s statistics. The first is the Non-Resident Speculation Tax, which applies a 15 percent tax to residential purchases in the Greater Golden Horseshoe Region by non-permanent residents and/or non-Canadian citizens.
The tax was introduced just under a year ago, and its overall impact is still being revealed. Although Kitchener-Waterloo residents don’t need to worry about it personally, it is affecting the market overall. The second factor, and in many ways the more major one, is the new mortgage stress test rules, which took effect on January 1st, 2018.
With the stress test, banks will assess potential borrowers on whether they could continue to make mortgage payments at a 2 percent higher interest rate than what they’re applying for. Previously, these stress tests were reserved for uninsured borrowers and those with a less than 20 percent down payment, but it will now apply to everyone.
This means fewer people will qualify for mortgages, and approved mortgages will potentially be lower amounts overall. You can read all about the changes to mortgage rules in 2018 (as well as how the new rules differ from the old ones) in our article here.
Bearing those factors in mind, though, let’s proceed.