This week marked the start of new mortgage lending rules for all Canadians, with new down payment requirements for higher-priced homes.
Starting Feb. 15, the Canada Mortgage and Housing Corporation requires down payments of five per cent of the first $500,000 of the purchase price, and 10 per cent of any amount over $500,000.
This is up from a previous requirement of five per cent for all mortgages. As always, CMHC will only offer mortgage loans below $1 million.
The federal change is meant to protect homeowners from having too little equity in their home, forcing them to pay more in advance for higher-priced homes. But it could also limit some homebuyers in their options.
In the Chilliwack area, there are currently about 100 residential properties listed over $500,000, but about 460 residential properties falling below that threshold. As for recently sold properties, the majority of home sales in Chilliwack were also below $500,000.
The CMHC only offers mortgage loans under $1 million, and there are currently about 15 residential properties listed with local Realtors over that mark.
The prices are in stark contrast to real estates prices in Vancouver and other urban centres to the west, where the cost of owning a home is so unattainable it’s created what some are calling an affordable housing crisis.
On Monday, Chilliwack-Hope MLA Laurie Throness said that’s nonsense, considering there are plenty of places throughout the province that are both affordable to live, and ready for growth. He gave a five minute speech in the Legislature extolling the virtues of living in the Fraser Valley, highlighting the affordability of housing.
“That there is some kind of province-wide housing crisis is simply not true,” he said, and that it’s wrong to assume that “everyone should be able to afford to live in Vancouver.”
He said he had once considered living in Vancouver, but since he knew he couldn’t afford a house, he had looked at condos. When even that seemed too out of reach, he research Abbotsford and made a home there. He has since moved to Chilliwack, which he says he loves, “and I’m going to live there permanently.”
“Nobody has a God-given right to live in a certain place,” he added. “And I do not consider myself a victim.”
He said businesses, too, should look to other more affordable places in the province to expand their businesses, where their employees can afford better housing for their dollar.
Schools in Chilliwack are growing unexpectedly, and staff at the school district are currently looking at where families are coming from. They have recently reported at least some of the growth has come from families moving away from bigger cities.