Justin P. owned a one-bedroom rental investment as well as his one-bedroom condo that he lived in with his wife in Burnaby. They have a child on the way this year and are looking for a new home.
Based on pre-qualifying for a $500,000 mortgage under the old rules, he sold his investment condo and put his home up for sale as well shortly thereafter. And that’s when things fell apart.
The condo sale completed in October without an issue. Then the rule changes were announced and it became clear that Justin needed to sell his remaining condo fast and get an accepted offer before the changes came into effect, or it would reduce what he qualifies for by around 20 per cent. He lowered the price of his condo to sell it out faster, and got an accepted offer on it within days.
He then went shopping frantically with only a couple weeks to find a place and get approved under the new rules. Justin couldn’t get a contract on a place that suited his growing family in time, and immediately had to downgrade what he was shopping for from $500,000 to $400,000 based on the new rules.
Had these rules been in effect when he initially considered buying, he never would have sold his condo. But now the new rules have forced him out of the market, when he could have easily afforded a better-suited home for his family.