Another new rule announced by Mr. Flaherty sets the maximum gross debt-service ratio – the percentage of household income being used to pay for housing – at 39 per cent so buyers will be less likely to take on mortgages that are too big and could leave them floundering if rates increase.
That’s the one that Andrea Benton, a 37-year-old entrepreneur in North Vancouver, B.C., said hits her family of four hardest.
“It means my total family income would have to be an exorbitant amount to afford an $800,000 house,” she said.
The changes in mortgage rules over the past few years have made owning a house less desirable, she said. While she understands the government’s intent is to bring prices down eventually, she said, “It feels a little Big Brotherish to me,” and questions whether it will have its intended effect on the hot North Vancouver market.
“We’re probably going to be long-term renters,” she said. “The closest I’ll probably own anything is a condo when I’m 65.”
– from ‘For many, new mortgage rules put home ownership out of reach’, G&M, 21 Jun 2012
The speculative mania in RE has desensitized Vancouverites to the actual meaning of large numbers.