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Across the country, an entire swath of young Canadians are being consigned to a life of renting — their home ownership aspirations tempered in the wake of a series of policy failures by the Ottawa Liberals.
The Liberal government rode to power in 2015 on a promise to champion the middle-class and those working hard to join it. Yet Canadians have seen a series of stealth policy moves from this government that have made one of the single biggest determinants of middle class status — homeownership — unaffordable for an entire generation of Canadians.
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Foremost is the introduction of the mandatory 2% mortgage stress test in January 2018, which means that Canadians buying a home need to prove that they can afford mortgage payments based on the higher of the five-year benchmark rate or their contract mortgage rate, plus two percentage points. The policy was supposedly introduced to protect Canada’s major banks and prevent households from taking on excessive debts. At least that’s what the federal bank regulator has said. Liberal Finance Minister, Bill Morneau, as well as several Liberal backbench MPs, have instead suggested that stress test was not about economic safeguards but instead has the desired effect of reducing real estate prices in major urban centres like Toronto and Vancouver.