L'ÎLE-DES-SŒURS, QC, Dec. 15, 2015 /CNW Telbec/ - The Québec Federation of Real Estate Boards (QFREB) supports the changes announced recently by the federal government, in which the minimum down payment for the purchase of a home will be increased for properties that sell for more than $500,000. The QFREB is pleased that these measures do not apply to properties that sell for less than $500,000, as this would have a serious impact on first-time buyers and would therefore affect the entire property buying chain.
Impact on the Québec real estate market
The QFREB believes that this measure will have little impact on Québec's real estate market. Home sales between $500,000 and $1 million represent only 7% of total year-to-date sales in Québec, while in Montréal it represents 11%. It is important to remember that single-family homes in Québec are currently selling for a median price of $230,000. In the Montréal Metropolitan Area, the median price of single-family homes is $289,000 and on the Island of Montréal, where prices are the highest, the median price stands at $395,000.
Another observation in Québec is that buyers who only have a 5% down payment are not very present in the $500,000 or more price range.
"Québec's residential real estate market has already been undergoing a smooth landing in recent years and a widespread increase in down payment would inevitably lead to a significant slowdown," said Pénéla Guy, Chief Executive Officer of the QFREB.
Elsewhere in Canada
In comparison, property sales between $500,000 and $1,000,000 represent 37% and 43%, respectively, of total year-to-date sales in the areas of Vancouver and Toronto, which are likely to be more affected by this measure.
Reminder of the measures announced
Canada's Finance Minister announced on December 11 that he will modify, as of February 15, 2016, the rules for government-backed mortgages by increasing the minimum down payment from 5% to 10% for the portion that exceeds $500,000. This announcement will not affect properties selling for less than $500,000, as the down payment for these homes will remain 5%. For properties selling at above $1 million, the required down payment will remain 20%.
About the Québec Federation of Real Estate Boards
The Québec Federation of Real Estate Boards is a non-profit organization composed of Québec's 12 real estate boards and the close to 13,000 real estate brokers who are their members. Its mission is to promote and protect the interests of Québec's real estate industry so that the boards and their members can successfully meet their business objectives.
SOURCE Fédération des chambres immobilières du Québec
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