Mortgage stress tests protect Canada from potential housing crash and financial crisis, head of national housing agency says.
Federal policy makers shouldn’t give in to calls to soften the mortgage stress test rule because it is protecting Canada from a housing crash and financial crisis. The head of Canada Mortgage and Housing Corp., Evan Siddall, sent a letter Thursday to the House of Commons Finance Committee, which is hearing submissions from industry groups urging it to moderate the stress test.
Many real estate groups complain that the mortgage stress test in Ottawa is harming home buyers who can't qualify for mortgages, they toughened the mortgage stress test for insured mortgages in 2016 and now since the start of 2018, home sales in Canada have fallen sharply. Siddall said the stress test is needed to forestall potentially devastating economic consequences if house prices continue to rise and Canadians continue to become more indebted.
Currently in Vancouver, one realtor tells clients who are hoping to sell that they are throwing away $5,000 every day that they delay the listing as the market contracts. With falling sales and prices, patient buyers are sitting on the sidelines, waiting for sellers to face reality.
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Summarized by: Onur Gul on instagram at @onurguldrone