Ever since the new mortgage rules were announced almost 2 weeks ago, I've been monitoring the Toronto MLS to see how many new listings hit the market and try to take advantage of the upcoming changes.
I found a few listings that explicitly highlight the impending rule changes in the "extras" section of the property description. Take a look at the screenshots below:
Under Pressure: Will Some Sellers Benefit From The New Mortgage Stress-Test? Photo
Under Pressure: Will Some Sellers Benefit From The New Mortgage Stress-Test? Photo
Whether or not prospective buyers will actually feel the pressure to make a move on either of these particular properties remains to be seen, but no doubt there are sellers out there who see a potential opportunity here.
I've already heard from a few seller clients of my own who are seriously considering bumping up their plans to list.
Instead of waiting until spring 2018 as previously planned, November 2017 has become a very attractive alternative.
While not every buyer needs to stress about the new stress-test (as I outlined in my blog post from last week), some will certainly be affected by the new rules. Specifically those who need to push their mortgage amount to the maximum.
Consider first time buyers, for example. They have no home equity to throw into the pot, and rely only on whatever down payment they have saved. These buyers would typically need to push their mortgage amount to the maximum in order to break into the market.
And these are the buyers that some sellers are hoping to capitalize on in the coming weeks.
A buyer with a current maximum budget of $450,000 might see their maximum budget reduced to as little as $360,000 after January 1st, 2018. This person will be highly motivated to make a purchase in the coming weeks, as they’ll be priced out of the market come the new year.
And it goes without saying that a buyer as highly motivated as this will be more inclined to pay a higher price in order to secure a property in time.
We’ll see how things play out over these next 2 months. I'm sure we'll see properties sell for higher-than-expected prices, and I'm sure that a number of sellers will benefit from buyers who are acting under pressure.
Dum-dum-dum Da-da Dum-dum.
Dum-dum-dum Da-da Dum-dum.
If you're a buyer and you have any questions just give us a shout and we’ll put you in touch with a mortgage specialist who can help.
If you're a seller and you're considering listing your home in the coming weeks, give us a shout and we’ll help you make the right move.