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Is The Stress Test Leaving Buyers on the Sidelines?


Following the release of relatively mediocre market statistics from February, the Toronto Real Estate Board (TREB) says it’s hoping to see strategies to improve homeownership affordability announced as Canada gets ready to head to the polls in October.

“There is a federal budget and election on the horizon. It will be interesting to see what policy measures are announced to help with home ownership affordability,” says TREB president Garry Bhaura.

Greater Toronto Area REALTORS® reported 5,025 home sales in February, representing a 2.4% decline year-over-year and a month-to-month decline (following preliminary seasonal adjustment).

The average selling price increased by 1.6% from February of last year, hitting $780,397. This rise is primarily due to condo apartments and semi-detached homes. The average prices for these homes increased by 6.1% and 9.9%, respectively, year-over-year.

Meanwhile, new listings were down last month by 6.2% compared with February 2018, suggesting that market conditions have tightened.

“The OSFI-mandated mortgage stress test has left some buyers on the sidelines who have struggled to qualify for the type of home they want to buy,” Bhaura says. “The stress test should be reviewed and consideration should be given to bringing back 30-year amortizations for federally insured mortgages.”

Board Hopes for Policy Changes to Improve Affordability.


According to the latest report from the Toronto Real Estate Board (TREB), the average selling price across all home types in the Greater Toronto Area last month was $780,397.

This is a modest bump compared to February 2018. Driving that increase: condo apartments and semi-detached homes, for which the average prices increased by 6.1% and 9.9%, respectively, compared to February 2018.

The report points out that market conditions in the GTA have certainly tightened. Total sales last month were down by 2.4% on a year-over-year basis, as were new listings, which declined by 6.2% compared to February 2018.

The statistics have the TREB calling for a review of the mandated home buyer stress test, which came into effect in early 2018.

“The OSFI-mandated mortgage stress test has left some buyers on the sidelines who have struggled to qualify for the type of home they want to buy. The stress test should be reviewed, and consideration should be given to bringing back 30-year amortizations for federally insured mortgages,” says TREB president Garry Bhaura.

“There is a federal budget and election on the horizon,” adds Bhaura. “It will be interesting to see what policy measures are announced to help with home ownership affordability.”

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