As a realtor, I would never tell you to rush your home purchase. As a friend, I’m telling you to get your butt in gear and start looking.
As of March 17, as in 10 days from now, CMHC (Canada Mortgage and Housing Corporation) is increasing their mortgage insurance premiums.
The average cost of a detached house last year was $300,000, according to the Winnipeg Realtor’s Association. If you were to buy a house for that price after March 17, you are adding an extra $1,500 to your mortgage. That’s about $5 per monthly mortgage payment.
The good news is that your closing date can be after March 17, 2017, but you have to get your applications submitted to CMHC before that date to avoid the increase.
And on top of that, May 1, 2017 the dreaded growth fees come into affect. These growth fees, or impact fees, add about $500 per 100 square feet in some new residential areas.
That’s an added cost of $9000 to a 1,800 square foot new home! For those of you sitting on the fence about buying new, now is the time to act.
If you get your building permits in before the deadline you have a six-month grace period to avoid the fee. That gives you just under two-months to find the perfect new home and start the process. Just be aware that building new can be a long process. I have attached an infographic below to help explain the steps.
But, I have a theory.
These new fees are going to add an average cost of $10,000 dollars onto new home builds, and that might be enough to dissuade people from buying new homes.
If that’s the case, then more people will be looking into the resale market. I’m no economist, but I do know a little about supply and demand.
With a higher demand for resale homes and the supply staying the same, the prices in the resale market would be pushed higher.
Just something to think about!
You might be asking who I am and why you should trust me. I’m Scott Kurz and I have been selling homes for many years now. I am always learning new things, and I want to share those things with you. An informed homebuyer is a happy homeowner, and I want to help you along the way.
I’ll tell you a little more about me in my next couple of blog posts, but I felt I had to share this information now, since it’s a time sensitive matter.
If you have a question you want answered about real estate comment below and I will do my best to answer it.
Happy house hunting!