OREA In the News

G&M: New mortgage stress tests could disqualify 10% of buyers: Bank of Canada 

New mortgage stress tests coming in 2018 could disqualify about 10 per cent of prospective home buyers, affecting $15-billion a year in new borrowing, the Bank of Canada says. The impact of the new restrictions is expected to be concentrated in the Toronto and Vancouver areas – the markets that have seen the steepest run-up in prices in recent years...Tim Hudak, CEO of the Ontario Real Estate Association, said the OSFI rule change and other recent housing-policy measures will be hard on buyers. 

"The cumulative amount of government intervention in the housing market means that many people will no longer be able to buy their first home or upsize when the kids come along," Mr. Hudak said. "The piling on of federal, provincial and local government interference risks not only hurting aspiring homeowners, but damaging the broader economy when fewer homes are purchased, furnished and renovated." 

Bloomberg: Bank of Canada Sees Financial System Vulnerabilities Easing

The Bank of Canada is optimistic higher interest rates and regulatory efforts to rein in risky borrowing will make the country’s financial system more resilient, though the process could take time to unfold and the outcome remains uncertain.

In its semi-annual financial stability report, Canada’s central bank painted a picture of a housing market where key steps have been taken to improve the quality of lending, particularly in the most expensive cities such as Toronto. At the same time, it warned risks remain elevated, particularly high household debt levels, and measures to rein in loans to the most highly indebted households will take time to work.

CTV: Early signs show vulnerabilities to high debt, housing has eased: Bank of Canada 

The Bank of Canada is flagging the steady climb of household debt and still-hot housing markets as the financial system's top vulnerabilities -- but it's also seeing some early signs of improvement. In a report Tuesday, the bank said there's some evidence Canada's exposure to these persistent trouble spots has begun to ease, thanks to healthy job creation, tightening housing policies and higher mortgages rates. 

Huffington Post: New Mortgage Rules Will Disqualify 1 In 10 Would-Be Borrowers, Bank Of Canada Says 

New mortgage rules coming into effect in January will disqualify about 10 per cent of prospective homebuyers from buying the home they want, the Bank of Canada says. Under new rules put into place by Canada's banking regulator, OSFI, borrowers of traditional mortgages (with 20 per cent or more down) will have to qualify at a rate that is two percentage points higher than the lender's offered rate. It follows a similar rule put into place last year for borrowers with less than 20 per cent down. 

Better Dwelling: Canadian Real Estate Is Pricey, Here’s How Much You Have To Earn To Buy A Home 

Vancouver and Toronto real estate is well out of the reach of many, but is that the case around the country? Numbers from the Canadian Real Estate Association (CREA) show a huge variance on the cost of a typical home across Canada. We wanted to see what this variance means for incomes. So we crunched some numbers, like we always do. Here’s how much you need to earn in order to carry a mortgage in Canada’s largest cities. 

CBC: Ultra-low rental vacancy rates highlight 'desperate' struggle to find affordable housing 

People paying a mortgage in Canada's major cities aren't the only ones feeling the heat from hot housing markets: many renters are struggling as well. Data released yesterday by the Canada Mortgage and Housing Corporation shows the national average cost of rent is up and the national vacancy rate has plummeted. That's forcing some renters in cities with ultra-low vacancy rates to consider whether the payoffs of living in a big city are worth the cost, both financially and in terms of quality of life. 

Toronto Star: Rental vacancy rates lowest in 16 years 

Affordable apartments are becoming increasingly difficult to find across the GTA, with vacancy rates hitting a 16-year low amid steadily rising rents, a new report shows. 

The details around the rising costs of rent and the decline in available apartments are spelled out in the latest Rental Market Survey for the Greater Toronto Area, from the Canada Mortgage and Housing Corp. 

Reuters: Private mortgage lending up in Canada as rules tighten: Bank of Canada 

Household credit in Canada continues to grow faster than income and the tightening of mortgage rules will likely continue to push borrowers to alternative lenders, including credit unions and private mortgage lenders, the Bank of Canada said on Tuesday. In its semi-annual Financial System Review, the central bank said it will closely monitor developments in private lending, particularly by mortgage investment corporations (MICs) which are growing to meet the increase in demand from borrowers. 

Financial Post: Vancouver considers banning foreign buyers amid 'perfect storm' in housing market

The city of Vancouver is considering restricting ownership of housing to local residents, among other strategies, as it looks to cool a hot real estate market that it says is fuelled by foreign and local speculation. A foreign buyer ban is just one of numerous supply and demand measures outlined in Vancouver’s new 10-year housing strategy, which was announced late last week and presented to city council on Tuesday. Council will vote on it on Wednesday. Even if passed, as expected, many of the measures being considered will need the support of federal and provincial governments, particularly those around taxation. “There is a perfect storm in Vancouver,” Gil Kelley, Vancouver’s General Manager of Planning, told council on Tuesday, pointing to the “excessive supply of global capital” flowing into the city, along with builders targeting investors, low interest rates, and favourable tax policies.

Maclean's: Markets, and not national strategies, will make housing affordable 

The Trudeau government recently unveiled its new National Housing Strategy, which includes a portable “housing benefit” of $2,500 per year, on average, to low-income households and the construction or renovation of hundreds of thousands of social housing units. But while these policies will benefit specific groups of people, they do not target broader affordability issues in Canada’s most expensive housing markets. 

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Mississauga Real Estate Board
3450 Ridgeway Dr #1
Mississauga, ON L5L 0A2, Canada
Phone: 905.608.6732
Fax: 905.608.9988