Bad news for agents

by Justin da Rosa16 Dec 2015
Upcoming mortgage rule changes will impact sales of pricier houses, according to one industry professional who is sounding the alarm in two particular provinces.

"These changes are not good for Realtors, especially those in BC and Alberta. We expect to see fewer home sales, and lower commissions earned in 2016 when the rules take effect," Ryan Suchet, President of Capital Growth Financial Corporation, said in a release.

Recently announced mortgage rules – which go into effect February 15, 2016 – will require larger down payments for pricier homes.

The minimum down payment for new insured mortgages will increase from 5% to 10% for the portion of the house price above $500,000, the finance ministry wrote in a release last week.

For example: A $750,000 home will now require $50,000 down -- 5% for the first $500,000 and 10% down for the remaining $250,000.

The new rules won’t affect homes below $500,000, which could lead to increased interest in those homes. Which, of course, would impact Realtor commissions.

However, the Toronto, Vancouver, and Calgary regions will likely be most affected.
In Calgary, for example, 86% of homes cost more than $500,000.

Meanwhile, Toronto and Vancouver boast some of the priciest average home prices in the country at $1.017 million and $1.175 million, respectively.

"These new rules mean less demand and consequently lower prices for homes in that range," Suchet said. "As a Realtor, you're going to be working harder and earning less on those sales.”


  • by John 12/16/2015 10:52:16 AM

    I disagree. If someone can afford to pay the mortgage payments on an expensive home, he can also afford to save up 10 per cent commission. Years ago, people had to have 25% down payment. 30 years ago, prices dipped and all those people who put small down payments on homes, walked away, leaving banks with thousands of homes on their hand. Gimme a break. want another financial crisis on your hands?

  • by greg 12/16/2015 10:54:44 AM

    Except that most people that buy into those markets are already applying larger down payments than 5% across the whole purchase.

  • by Matt 12/16/2015 11:20:27 AM

    I Agree with Greg. I am in touch with a couple of mortgage brokers on weekly basis and the last time I checked, only AAA applicants would qualify for 5% down payment. People with 750 Credit scores, no revolving debt, and $100K income.

    And similar to John's point, those people could easily save up the extra down payment required.

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