Toronto real estate board urges evaluation of mortgage stress test

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TORONTO

The slowdown in the housing sector has alarmed stakeholders and now the Toronto real estate board is urging Ottawa to consider lifting some of the restrictions that have been imposed on buyers as a result of the mortgage stress test. In the era of rising interest rates, the board says that the policy has affected the overall economy and has turned Toronto’s once red-hot housing market uncomfortably cooler.
“While we saw buyers return to the market in the second half of 2018, we have to have an honest discussion on whether or not today’s homebuyers are being stress tested against rates that are realistic,” said John DiMichele, chief executive of the Toronto Real Estate Board (TREB) in a statement Wednesday.
“Home sales in the GTA, and Canada more broadly, play a huge role in economic growth, job creation and government revenues every year. Looking through this lens, policymakers need to be aware of unintended consequences the stress test could have on the housing market and broader economy.”
TREB points out that many potential homebuyers have changed their plans to buy homes after the mortgage stress test came into effect and if things are changed, they could start looking for homes.
It notes that the stress test, which is mandated through the Office of the Superintendent of Financial Institutions (OFSI) has resulted in homebuyers having to qualify for monthly mortgage payments nearly $700 more than what they would actually pay.
Meanwhile TREB forecasts a better sales outlook and sees prices going up 4 per cent.
The board says increased buying intentions will be helped by population growth, low unemployment rates and lower fixed-rate mortgage rates this year.
The expected average selling price for the year in Toronto and the Greater Toronto Area will increase to $820,000 – close to the peak reached in 2017 – and up from an average of $787,195 in 2018.
Much of that price growth will be led by the hot condominium market as homebuyers look for more affordable housing options, while the board anticipates the price growth for detached properties to be below the average growth rate for the total market.

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  1. Shut down criminal organizations like TREB and all affiliates for years feeding off the housing bubble with desperate attempt to keep it going.