In October the Liberal government changed the home purchase financing rules across Canada. This rule change has impacted the Windsor market profoundly is some expected ways.
Where a person could qualify for a loan at 2.32% interest and be able to buy a $215K home, under the new rules that same person has to qualify at 4% + and is now only able to buy a $180K home.
In the Windsor market, the average selling price is $250K + so there is very limited supply under $180K.
This limited supply that would have sold for $150K back before October is now selling for $180K or higher as there is a large pool of Windsorites that can only qualify for this price point.
Yet, residents of CANADA are also in the Windsor market looking for homes they can buy for cash in the $150K price range.
This has put huge demand into the local market.
As this huge demand is met with folks that simply can not qualify for financing under the new government rules, those residents who would have otherwise moved up into a raised ranch are no longer qualified for financing so they are staying in their home and refinancing to improve it.
With no supply, demand has increased the selling price further.
With the government program of limited funding, the decrease in supply due to this government program, and the flood of population into Windsor, that is why the pricing point has increased from $205K to $255K in a year. The very government intervention that was supposed to cool the market for homes in Canada has actually crushed the blue collar Windsor resident who would have moved up to a newer home and has made it nearly impossible for the rank and file to do anything but rent.
Indeed, in the week that has just passed, we listed 103 homes on Wednesday and by Tuesday, after the long holiday weekend, we had sold 79 of the homes listed and had conditional offers on the other 24.
Of the homes that sold over the weekend, that 79.. at least 10 of them sold to folks represented by realtors outside of the Windsor market. In fact, one realtor from Markham bought $653,000 of Windsor over the weekend and the average selling price of the homes bought was $163,250… Right in the sweet spot of what a rank and file Windsorite could otherwise buy. Will these 4 homes be lived in by the new resident?
We should rest easy though. The Wynn Government is announcing plans to increase the rights of renters so that they have more layers of Government to turn to.