18 March 2019

As you know, the mortgage stress test was implemented in order to restrain a sharp prices growth in Toronto and Vancouver, but the average home price in the Lower Mainland almost doubled, while remained nearly unchanged in other parts of the province.

“We want a review of the current mortgage stress test and the return of 30-year amortizations for federally insured mortgages,” – BCREA’s CEO Darlene Hyde said. “It’s important to change these rules, otherwise many B.C. families will be left behind.”

First time, the CEO of TREB called on the federal government to review the stress test last month. Although admitting the right measures taken on the main housing issues, TREB still pointed to the mistake of introducing a stress test that, together with growing mortgage rates, is hurting not only buyers, but the entire economy as well.

As national sales slowed in February, the Canadian Real Estate Association (CREA) expects sales activity to reach the lowest level since 2010 this year.

Canada’s February home sales were down by 4.4% annually and by 9.1% monthly.

According to CREA, total 2019 sales will fall by 1.6% in 2019 to 450,400 transactions. Next year, a 2% increase to 459,400 sales is expected, The Canadian Press says.

“We need to review the implementation of the OSFI-mandated 2% mortgage stress test,” – noted Darlene Hyde. “Although buyers started returning to the market in the second half of 2018, we still need to discuss whether today’s homebuyers are facing tests under realistic rates. Real estate sales in the GVA/GTA and the rest of Canada play a key role in the national economic growth, job creation and government revenues. From this perspective, policymakers should understand all the possible unintended consequences which the stress test may have on the real estate market and the entire economy.”