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The current benchmark qualifying rate of 5.34%, which is nearly twice as high as the old 2.79% value, took effect at the beginning of the year.
Criticisms of the stress test by both observers and the general public have seemingly proven prophetic, as the RateHub.ca study found that the new rules – along with BoC’s rate hikes since July 2017 – are preventing a significant fraction of Canadians everywhere (except in Ottawa and a few select markets) from achieving their home ownership dreams.
“When considered together, these changes mean that Canadians can qualify for less home, while also having to pay more per month for their mortgage,” RateHub stated.
RateHub added that those in Toronto and Vancouver would find it especially difficult, as they will qualify for less than half of active home listings in 2018 (20% and 8% of listings, respectively) compared to last year (43% and 20%, respectively).
The situation is more favourable for would-be buyers in Calgary and Montreal. Average earners in Calgary are expected to qualify for 77% of active listings, compared to 89% last year. Those in Montreal will qualify for 78% of home listings using the new stress test value, compared to 87% in 2017.
REP magazine www.repmag.ca