CALGARY , Dec. 14, 2015 /CNW/ – New Canadian mortgage rules could soon cool down housing prices, and put the ice on commissions for Realtors. Canada’s new Liberal government announced last week new minimum down payment requirements in order to control what it sees as inflated housing prices in many of the country’s large urban centres like Toronto and Vancouver . Buyers will now have to cough up a minimum of 10% (instead of 5%) for homes valued between $500,000 and $999,999 .
“These changes are not good for Realtors, especially those in BC and Alberta . We expect to see fewer home sales, and lower commissions earned in 2016 when the rules take effect,” said Ryan Suchet , President of Capital Growth Financial Corporation, a company dedicated to providing commission advances to Canadian real estate agents.
According to CIBC World Markets, Calgary , Edmonton , and Victoria will see 7-10% of home sales affected negatively. On the heels of the slowing oil market, this comes as another major blow to Calgary where 86% of new single-family homes are over $500,000 .
“These new rules mean less demand and consequently lower prices for homes in that range,” said Suchet. “As a Realtor, you’re going to be working harder and earning less on those sales. Now more than ever, agents are going to need our commission advance service.”
Suchet believes financing will now become more complicated for the buyer due to proposed changes on mortgage companies, leading to more deals falling through. This will also put more pressure on the market resulting in lower commissions.
Capital Growth Financial Corporation is a Canadian company that provides commission advances to Realtors. The company will provide the agents much of their commission now, so they don’t have to wait – sometimes months – for their payments after the closing date.
Commission advances are provided to Realtors from all brokerages in Canada , from the large multinationals, to the small independent offices. Most customers receive their commission same-day from Capital Growth’s professional support team. Click here to learn more.