Real Estate Investors can take heed with the new mortgage lending rules recently announced by Finance Minister Jim Flaherty. In a nutshell ( no need to write a long commentary on something simple), creating tighter lending rules will create an increase in renters for the greater Simcoe County including Barrie and Orillia. An increase in renters is a good thing for those interested in investing in real estate outside of the usual RRSP format. ( Unless of course you want to use your RRSP as a 2nd mortgage and use that for investment real estate....well that is another story....)
These rules in reality will affect the fringe first time buyer. The actual increase on a mortgage payment will roughly be 100 a month or 1200 a year. The first time buyer is a strong component of the rental pool in Barrie Ontario. The added pressure to come with an extra 100 month to meet the new mortgage rules will probably keep renters where they are. And I stress the ‘fringe" first time buyers.
These new mortgage rules are a soft change. They are not dramatic and we should not see any significant change in the economy as a whole. My read on these changes is that Mr Flaherty wanted to show Canadians ( and the international community), that Canada is on top of any subtle changes in our financial well being. And yes much recent press has been given to the rising debt loads of Canadians, but this move will be mute in the larger scheme of things.
So for investors this may not be a bad change. It should keep the rental vacancy rates down in Orillia, Barrie and Innisfil.
For more information on in Barrie, Midland, Orillia or Innisfil contact mark Vosylius at 416-779-2897 or Mana Investments.