Thursday, March 3, 2011 - Edmonton Home Sales Still Slow Despite New Mortgage Rules Looming

It seems that the promise of tighter mortgage lending rules set to be implemented later this month is not causing much of an increase in Edmonton home sales. In February there were 1,044 homes sold, which is better than the 735 in January but 20.6 percent less than February of 2010.

Looking at Canada as a whole, resale home sales for January were showing the highest numbers since April of 2010. The top three markets were Edmonton, Toronto and Victoria, according to the Canadian Real Estate Association. Its chief economist, Gregory Klump believes that part of the increase is because of those same mortgage lending rules, set to go live March 18th.

But according to Chris Mooney, who is president of the Realtors Association of Edmonton, in Alberta’s capital those rule changes are having little if any effect. True, this time around the rule change is not as drastic, nor will they affect as many people.

The new rules involve a change from a maximum 35 to 30 year amortization period for mortgages that are backed by the government. Home buyers will also only be able to mortgage 85 percent of the value of a home, rather than the current 90 percent. Lines of credit will also no longer be backed by the government.