Sudbury housing prices continue to rise

Housing prices in Greater Sudbury continue to increase but some observers say new rules around larger down payments and shorter amortization periods of mortgages may have an impact on the market.

The average home price in Sudbury is about $250,000 and that number is projected to rise slightly next year to $251,000, according to the Canadian Mortgage and Housing Corporation.

New home owner Peggy Meigs said she and her boyfriend looked for a year before purchasingandfound the prices in Sudbury to be high.

I was quite surprised, she said.I always thought Sudbury was pretty fair with respect to the product that youre buying real estate wise. I noticed over the year that the houses that were livable but still kind of fixer-uppers were higher than we thought at first.

The president of the Sudbury Real Estate Board acknowledgedprices have been climbing each year. Carl Young said the average home price was just over $221,000 in 2010.

Butnew rules are affecting the housing sector, he noted.

Your payment is that much more when you cant amortize it [over] the 40 years they were allowing, Young said.Now, its back to 25 [years]. So that definitely cut some people out of the market.

Young said the new, tighter rules are making it more difficult for home buyers to get into the market.

The banks have taken precaution to who their lending money to [and] CMHC is really taking precautions right now, he said.

With the policy changes that theyre looking at going forward, [I]suggest buyers might want to buy sooner than later based on what the banks are doing.

Dont speculate

A financial adviser withManulifeinSudburysaid strong housing prices should come with an extra helping of caution.

There can always be a market correction, I think, almost at any time, RubyLougheed-Yawneysaid.

The likelihood of a market correction is always greater when prices are strong, and they are strong right now. They are higher significantly higher than they were a number of years ago.

Lougheed-Yawney said potential home buyers need to be prepared before purchasing. She said people need to have enough money put away to deal with potential rising interest rates, in addition to dealing with a shorter mortgage period.

Dont speculate. Dont assume that housing prices are always going to go up, she said.

Prepare for the worst and hope for the best. Prepare that we could have a correction of housing prices and that correction could be anywhere from zero and a very significant correction.