Toronto Housing Forecast

The latest housing forecast by a Canadian Realtor forecasts this could be a strong year for real estate across the country. The force behind the market strength is said to a rush to buy in the first half of the year in advance of anticipated interest and mortgage rate hikes in the second half.

Despite their conviction about the housing sales forecast for 2011, it’s unlikely the rise interest rates will spur sales in the first half. Instead, home buyers will be wanting to beat the deadline for the new mortgage lending rules. Those rules include a new maximum amortization of mortgages to 30 years from 35 years. And buyers will only be able refinance up to 85 per cent of the value of their homes on government-back mortgages, down from 90 per cent. The new measures will hurt first time home buyers, however the finance minister didn’t specify that first time home buyers have been defaulting on their home loans. The new policy is set to dry up mortgage credit and reduce demand for homes and condos.

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