Well not really surprisingly, yesterday the Office of the Superintendent of Financial Institutions (OSFI) proposed changes to the mortgage stress test in an attempt to cool the hot housing market. While theses proposed changes would only effect those putting down 20% or more, they are totally the incorrect approach to dealing with the hot housing market. It is true that almost every market across Canada is experiencing high demand, this is not due to speculation this is because of a lack of supply that is driving up prices.
Think about it we have had several years prior to the pandemic of record levels of immigration. As well as the past year with people working remotely with nowhere to spend their money as they can’t travel nor eat out so they are sitting on record levels of savings. So what are people doing is that they are looking to purchase real estate or move up from their current home.
The challenge is the housing supply has not really changed. It is still taking developers extraordinarily long time to get their projects started, yet now we have more people in the market looking for a place to call home. So the knee jerk reaction is to the move the stress test from 4.79 to 5.25%. Yes they may slow things temporarily but it does noting to address the actual cause of the problem which is a lack of supply. As soon as that is addressed and that will take years, my advice to you is keep saving up and be patient.
I look forward to hearing from you in regard to your mortgage needs.
p.s.s- I should tell you that I am licensed in Nova Scotia, Ontario(M18001555) & in British Columbia(BCFSA #504098).