With stricter mortgage rules now in effect across the country, big banks are being more cautious as to which consumers they are lending money to.
However, potential home-buyers in Prince George won’t feel as big of a sting when compared to the major cities.
“We will be affected in Prince George but not to the extent or the intensity of what a recent article had determined and I think that is more for markets like Vancouver and Toronto and we feel that people have a pent-up desire to buy right now,” says Bob Quinlan with the BC Northern Real Estate Board.
According to mortgage brokers, the borrower rejection rate in Canada has gone up as much as 20% after a new stress test for potential home buyers was introduced earlier this year.
Quinlan believes this is a non-issue in Prince George.
“As far as rejected applications, no, we don’t send it to any lender when people don’t have enough money to borrow and rejected applications would have to be other reasons such as credit.”
“I think we have a pretty good core of lenders, brokers and also an informed public so they are finding out what they can be pre-approved for, what they can spend and they can go do that accordingly. We have a good range of prices in Prince George and some people may have to realize that last year they could have bought something bigger but this year they can only buy so much.”
The mortgage rules were first made public in the fall of 2016 and pretty much puts everyone on an even playing field, despite some early concerns about home prices possibly going down in some areas.
“It puts everybody in the same position and what it does is just decrease some of the money that’s available to borrowing power to all the buyers and that will probably affect some prices but again in Prince George, with our price range it doesn’t do that,” added Quinlan.
“What it means is that people can shop for their rate and that could be anywhere from 3.09% to or up to 3.49% for a fixed rate but they have to prove that they have that they can pay a fixed rate of 5.14%, so the Bank of Canada wants to make sure they have room in your income to pay if the rates go up.”
He adds a few more houses could become available on the market than per usual but as of right now the market is good and steady in Prince George.