Mortgage rules tightened to curb the risk of a housing crash in Toronto and Vancouver.
The required down payment on homes will continue to be 5 percent for the first $500,000 but will rise to 10% for the balance over $500,000, from February 15, 2016 onwards.
Finance Minister Bill Morneau announced the plans on Friday morning, December 11, 2015 in Ottawa.
“The government’s role in housing is to set and maintain a framework that is equitable, stable and sustainable,” Morneau said in a statement. “The actions taken today prudently address emerging vulnerabilities in certain housing markets while not overburdening other regions.”
The risk of overheating is greater in Vancouver where the average price for a detached home has jumped to almost $1.6 million, and in Toronto where a detached home in Toronto averages more than $1 million.
First time buyers will now find it more difficult to purchase a house. Calgary’s home sales, already suffering from the collapse of oil prices and heavy taxes imposed by the provincial NDP, will be further hurt.