Starting December, we’re seeing the boldest changes to CMHC-insured mortgages in decades. These updates could mean bigger mortgages, increased buying power, and potentially faster price gains in markets like Toronto.
Let’s dive into what these changes mean and how you can take advantage of them!
Higher Mortgage Caps: From $1M to $1.5M
Starting December 15, 2024, the insured mortgage cap will rise from $1 million to $1.5 million.
This is a huge win for buyers in high-cost markets like Toronto, where homes are often priced around or just above that $1M mark. With the new cap, more buyers can qualify for larger mortgages while still benefiting from lower down payment requirements.
30-Year Amortizations for All New Builds
Another major change? The extension of amortization periods. Back in August, CMHC introduced 30-year amortizations for first-time homebuyers purchasing new builds.
As of December, this option will be available to all new build buyers. This increase from 25 to 30 years boosts purchasing power by around 10%, potentially accelerating price growth in the new build market.
What’s the Government Really Aiming For?
While these changes are being marketed as measures to help with affordability, there might be more to the story.
The government could also be addressing concerns about rising uninsured mortgage exposure or trying to assist builders struggling with closings due to high rates and prices.
Short-Term Boost, Long-Term Concerns
In the short to medium term, these changes could benefit current homeowners more than new buyers.
As the mortgage cap increases, we’re likely to see home prices between $1M and $1.5M rise quickly, particularly in Toronto where many properties fall within this range.
Combine that with expected lower rates by year-end, and we could be looking at a much stronger market in early 2025. However, these changes might also be pushing affordability issues further down the road, potentially making them harder to address later on.
How Can Toronto Real Estate Investors Take Advantage?
For real estate investors, this could be an opportunity. With lower rates and increased buying power, there might be deals to scoop up while the market is soft.
But it’s crucial to stay tuned in, as real estate is shifting fast. Instead of just focusing on appreciation, consider investing in multiplexes with strong rental income or taking on value-add projects for more reliable returns.
How We Can Help
If you’re looking to invest in Toronto real estate, we’re here to help.
As a Toronto sales brokerage specializing in multiplexes, we can assist you in finding great deals, converting properties, and managing your investments. Whether it’s a ready-to-rent multiplex in Toronto or you need help converting one into a multiplex, we’ve got you covered.
Here’s what it’s like to start as a client with us:
- Initial Consultation: We’ll talk with you to understand your needs and teach you how to invest wisely in Toronto real estate.
- Market Search: We’ll search the market to find the perfect property for you.
- Renovation Support: If the property needs renovations, our trusted contractors are ready to help, and we’ll coach you as you manage the project.
- Leasing and Management: If you need help renting out and managing your property, our leasing and management team is here for you.
Ready to get started? Click on the link below, and let’s start working together!
What Toronto Real Estate Investment Is Right For You?
Check out our complete Toronto real estate investment guide for all the details and real-life examples. If you’re ready to dive in, just book a call with us!
