New CMHC rules make it easier for homeowners with suites to borrow money
First-time home buyers in Metro Vancouver's hot housing market will soon get a break when it comes to buying a new home.
Starting this fall, the crown corporation will allow buyers to include their income from secondary suites when they apply for a loan.
The rule change is aimed at boosting affordability, although some experts say the new regulations could actually further heat up housing markets in Toronto and Metro Vancouver.
In the Vancouver area, the changes would most likely be felt in suburban areas, including the Fraser Valley, where single family homes are still within reach of average first-time buyers.
Professor Tom Davidoff of the University of British Columbia's Sauder School of Business said the changes will likely appeal to young families, allowing them to buy bigger properties with suites that can later be used by the owner.
"When the family is larger, they can toss out the renters and occupy the space themselves without having to move," Davidoff said.
Tsur Sommerville, also with the UBC Sauder School of Business, said the CMHC change will have more impact than the Bank of Canada's recent prime rate reduction.
"For someone who is looking to buy a house with a basement suite that was generating $1,200 in rent, they can borrow an additional $72,000 to purchase that unit because of that change," Sommerville noted.
Real Estate analyst Don Campbell says this policy change will mean a bigger boost in suburban markets and predicted that the population in these regions could rise along with the demand.
Source: CBC News