The Covid-19 pandemic is having a devastating effect on the mortgage industry in Mississauga, Ontario. Many lenders are no longer offering mortgages, and those that are still providing loans are imposing much stricter terms, As a result, many home buyers are finding it difficult or impossible to get financing for their purchases. This is causing a significant slowdown in the housing market. In some cases, houses are remaining on the market for months without being purchased, Covid-19 is also having a direct effect on the construction industry, with many subcontractors going out of business or being forced to cut back drastically. This article aims to analyze the impact that the Coviid-19 outbreak has had on Mississauga
The first signs of trouble appeared in Spring 2020 when Covid-19 had its first appearance in Canada, By this time most lenders had already established credit policy and pricing guidelines in an effort to avoid the worst of the economic fallout from the pandemic. These policies require that, in order to obtain a mortgage, applicants must have been employed for at least 12 months and that their employers will continue to employ them for at least six months after the bank extends credit (for variable-rate mortgages) or twelve months (for fixed-rate mortgages). As a result of these guidelines, many first-time homebuyers who were planning to purchase before the end of 2020 found themselves unable to get financing. The lenders that were still offering mortgages imposed stringent terms and increased their interest rates well beyond what was normal in previous years. In addition, some lenders began requiring down payments of as much as 40%.
The slowdown in the housing market that began in 2020 has continued into 2021 This is especially true in the suburbs of Mississauga, where prices have been dropping significantly. The construction industry has also been hit hard by Covid-19. Many subcontractors have closed their doors or are only hiring on a part-time basis. The big banks and many credit unions that once provided mortgages to anyone who could fog a mirror continue to do so, but they now require down payments of up to 40%. Lenders who previously offered 5% down payment loans — such as
ING and Home Trust — have pulled out of the market.
So far, there has been no relief in sight for the housing market in Mississauga to this point. if anything, the situation is likely to get worse before it gets better. Covid-19 has had a devastating effect on the mortgage industry and the construction industry, both of which are crucial to the health of the economy. The slowdown in the housing market will likely continue for some time until the full extent of the pandemic has been felt and the economy begins to recover. The Covid-19 has truly had a devastating effect on the mortgage industry in Mississauga and its surrounding areas. With vaccines now readily available and governments globally implementing lockdowns, it is hoped normality will resume before the end of 2021 or hopefully sooner.