Star Phoenix, Dec 12, 2015- The Liberal government’s decision to hike the minimum down payment for homes worth more than $500,000 will have little effect on Saskatoon’s housing market, according to a local real estate agent.
The minimum down payment will increase to 10 per cent for the portion of the price over half a million dollars beginning in February, the government announced Friday. The base down payment will remain at five per cent for homes worth less than $500,000 and 20 per cent for those valued at $1 million or more.
“This decision is largely made with the hot, expensive markets in mind,” said Royal LePage Vidorra owner and broker Norm Fisher. “In Saskatoon, 90 per cent of our housing market is at or below $500,000, so it’s a fairly minimal impact here.”
The average residential sale price in Saskatoon is expected to fall two per cent this year to $354,150 and remain flat through 2016, according to the RE/MAX Housing Market Outlook report published Thursday.
The average price of a home in the Greater Toronto Area is expected to come in at $622,150 this year, while houses in Greater Vancouver are forecast to sell for an average of $947,350, climbing past the $1 million mark next year, the report stated.
If someone making on offer on a $750,000 home can’t come up with the extra cash, perhaps that person should look for a less expensive option, he added.
Al Didur, a real estate agent with Realty Executives Saskatoon, takes a different view.
“I think it’s a mistake, and it’s unfortunate,” he said.
Didur acknowledged the move will have a more modest impact in Saskatoon than in higher-priced markets, but said it could hinder some buyers’ efforts to buy a house and begin building equity.
He also bristled at the prospect of government interference in the housing market.
“They’re trying to control the Vancouver and Toronto marketplaces; this is the reason for it. The problem is that it affects marketplaces elsewhere,” Didur said.
Speaking to reporters in Ottawa, Finance Minister Bill Morneau said the move will stabilize the market by creating a buffer for some people, but acknowledged that it will affect less than 10,000 home purchasers, or one per cent of the total market.