Speculative real estate activity has long been vilified as a leading contributor to skyrocketing home prices and lack of supply in Canada’s biggest markets; could new restrictions, that will actually effectively curb investor demand, be coming down the pipe?

Recent chatter in the mortgage space posits Canada’s finance policy makers could be mulling over significant changes for borrowing criteria on investment properties:

a)A minimum down payment of 35% (up from the current 20% for non-owner occupied properties)

b)Banning the use of a Home Equity Line of Credit as a down payment source, in addition to borrowed or gifted funds, on an investment property

Housing affordability — and the role investors have played in it — was a major hot-button issue in the last federal election, with the Liberals campaigning on a number of promises targeting eroding affordability. These included an anti-flipping tax, a temporary ban on foreign buyers (which has already been kiboshed via committee vote), and revisiting the tax treatment of large corporations scooping up properties as holdings. However, it’s since been crickets in terms of any actual implementation… though yesterday’s announcement of a governance deal between the federal Liberals and the NDP — which vows to “tackle the financialization of the housing market by 2030 — could breathe new life into some of these promises.

Continue to read on: STOREYS