QFREB Worried About Possible Changes to Mortgage Rulespar Andrew Rickard | July 28 2015 01:06PM
The Quebec Federation of Real Estate Boards (QFREB) says that any further tightening to mortgage rules would be "catastrophic" for the province's real estate market.
In response to media reports that the federal Department of Finance is considering proposals that would increase the current minimum mortgage down payment from 5% and shorten the maximum amortization period from 25 years, the QFREB issued a statement last week warning that such a move would damage Quebec's real estate market.
The federation notes that the number of property sales in the province has actually decreased in three of the last four years, dropping by 12% between 2010 and 2014, and that the median price of single-family homes only increased by 0.4% in 2013 and by 0.9% in 2014.
QFREB president Patrick Juanéda suggests that, as far as the Quebec real estate market is concerned, the federal government created the soft landing it desired when it reduced the maximum amortization period from 30 to 25 years in 2012. He argues that further measures would be particularly discouraging for first-time buyers, who account for about a third of all real estate transactions in the province, and he points out that Quebec's home ownership rate remains ten percentage points lower than in the rest of Canada.
"An additional turn of the screw by Ottawa would be too much for Quebec's housing market," he says. "Unlike the Toronto and Vancouver markets, the Quebec real estate market needs some breathing room to catch up on its long-standing delay in its home ownership rate."