Canada Tries To Bail Out Real Estate Developers With 30-Year Mortgages
Canada is rolling out new policies to help its highly indebted households support soft demand for new housing. Earlier today, the Government of Canada (GoC) announced new measures to increase the amount of capital used to buy new homes. New home sales have been weak at these prices, and rather than letting prices fall, it appears policymakers have concocted a scheme to make the higher prices more “affordable.” Not just by increasing the amount of debt households can carry, but they’re also encouraging first-time buyer’s to divert more money from the country’s capital markets and put it towards housing.
Canada To “Help” First-Time Home Buyers To Pay Higher Prices
Canadian finance minister Chrystia Freeland announced new measures to help with “affordability.” Starting August 1st, mortgage lenders can start offering 30-year amortizations to first-time home buyers. These loans will be restricted to new construction.
In addition, Canada will also dramatically raise RRSP withdrawal limits. First-time buyers will see the amount they can withdraw for a down payment increase to $60,000. That’s double the current limit in place. …[Continue Reading]