New Policy Proposal: Minimum 45% Down-Payment on Non-Primary Homes

I call this Dynamic Home Leverage. Minimum 45% down-payment requirement on second home. Every home you attempt to buy after your second home will increase by 2.5%. So for example the Third home 47.50%, fourth home 50%, and so on.​Continuous buying power is important in any market. Considering the housing market has started to become a significant part of Canada’s economy; it is important to approach it gently.​Purchasing power is easy and accessible to many investors when buying a home. However, many of these investors are utilizing the purchasing costs of living, rather than investments.​If the government requires non-primary (two or more home ownership) home buyers to put a minimum down-payment of 40%, it would only allow organic purchasing power to proceed.​This is a win-win situation. The investors that purchase investment-based homes, would’ve put a lot more down-payment which would make it more difficult for them to more quantities. Without the 40% requirement, they would of been able to purchase two since all they need is 20%. This benefits the supply issue that Canada is facing. Allow for supply to be available to people that actually need the homes. Another benefit is the long-term factors of people not being overleveraged. We won’t need to worry about a domino effect of defaulting mortgages, and collapsing financial institutions.​So definitely something that should be considered. via /r/canadahousing https://ift.tt/3cGnoz4