BRANTFORD – The Canadian Mortgage and Housing Corporation are forecasting a nine to eighteen percent decrease in house prices over the next twelve months as a result of the COVID-19 pandemic.
Sales Representative for the Platinum Living Team with Sutton Team Realty, Paula Tysoski, says the local housing market hasn’t experienced any decrease to date.
“We haven’t seen that that in Brant. We still have low inventory, as we’ve had for the past many years,” Tysoski says. “The average price of a detached home in Brantford and Brant has actually increased over ten percent compared to May of 2018.” What we see is one of the strategies buyers are using is moving to communities with lower prices. We do see a considerable number of people leaving the GTA and even the KW area to select Brant
In response to the forecast, the CMHC recently announced changes to its underwriting policies for insured mortgages in a move to protect future home buyers and reduce risk.
“It used to be that you would have to have a minimum credit score of 600 and now that’s raised to 680,” Tysoski explains. “If we take a look at what the Equifax guidelines are if you are 560 – 660 that’s considered ‘fair’ credit rating and at 660 to 725 is considered ‘good’ where over that would be considered ‘very good’ and then ‘excellent’.”
The new minimum credit score requirement for insured mortgages will come into effect on July 1st. The CMHC is also tightening rules for sources of down payment and no longer allow non-traditional sources that increase debt to be used as equity for insurance purposes.
Uncertainty in the housing market is also expected to affect new home building, which is forecasted to see a decline between 50 and 75 percent this year.