{"id":9474,"date":"2018-06-21T11:11:54","date_gmt":"2018-06-21T18:11:54","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=9474"},"modified":"2018-06-15T16:05:33","modified_gmt":"2018-06-15T23:05:33","slug":"new-mortgage-rules-are-to-blame-for-fast-rising-condo-prices","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2018\/06\/new-mortgage-rules-are-to-blame-for-fast-rising-condo-prices\/","title":{"rendered":"New Mortgage Rules Are to Blame for Fast-Rising Condo Prices"},"content":{"rendered":"

Over the past two years, Canadian home buyers have had to endure two major changes to mortgage qualification rules. And while the regulations have been rationalized as an effective way to dampen hot housing prices, one expert says they\u2019ve done just the opposite.<\/p>\n

In 2016, Canada\u2019s Department of Finance introduced a mortgage stress test for buyers with less than a 20% down payment. In January 2018, an additional stress test was introduced for uninsured buyers.<\/p>\n

Both measures have seriously cut into Canadians\u2019 home buying budgets and \u2014 according to Realosophy president John Pasalis \u2014 inadvertently driven up prices in the country\u2019s condo market.<\/p>\n

\u201cOne of the intended goals of this policy was to help cool down the rapid increase in house prices, in particular in cities like Toronto and Vancouver but when we look at the data for Toronto, it actually had the opposite effect for the one house type that was still within reach of most first-time buyers \u2013 condominium apartments,\u201d writes Pasalis.<\/p>\n

In January 2012, the average price for a condo was $321,475. That number had risen 34% to $429,407 by the time the Department of Finance introduced its stress test in October 2016.<\/p>\n

\u201cSince then, the average price for a condo climbed to $559,343 in April 2018, a 30% increase in just a year and a half since the stress test was introduced,\u201d he writes.<\/p>\n

With buyers unable to qualify for expensive low rise homes, Pasalis writes that a surge of demand has boosted condo prices, pushing them out of reach of many would-be buyers.<\/p>\n

\u201cRather than dampen demand and help cool prices the mortgage stress tests actually inflated demand in the condominium market and caused bubble like appreciation because the stress test pushed many first-time buyer\u2019s budgets down making condominiums the only affordable option for them,\u201d he writes.<\/p>\n

But doing away with mortgage stress tests isn\u2019t the answer, according to Pasalis. He argues that the government did too much too soon, and should consider a more measured approach moving forward.<\/p>\n

\u201cDramatic policy changes are going to have dramatic effects on the housing market,\u201d he writes. \u201cIt\u2019s unfortunate that the federal government\u2019s stress tests have made condo prices less affordable and more vulnerable than before.\u201d<\/p>\n

This Expert Thinks New Mortgage Rules Are to Blame for Fast-Rising Condo Prices<\/a> by Sarah Niedoba | Buzz Buzz Home<\/p>\n","protected":false},"excerpt":{"rendered":"

Over the past two years, Canadian home buyers have had to endure two major changes to mortgage qualification rules. And while the regulations have been rationalized as an effective way … [read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"class_list":["post-9474","post","type-post","status-publish","format-standard","hentry","category-market-updates"],"yoast_head":"\nNew Mortgage Rules Are to Blame for Fast-Rising Condo Prices • Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.roryc.ca\/blog\/2018\/06\/new-mortgage-rules-are-to-blame-for-fast-rising-condo-prices\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"New Mortgage Rules Are to Blame for Fast-Rising Condo Prices • Rory C Real Estate | Oakwyn Realty\" \/>\n<meta name=\"twitter:description\" content=\"Over the past two years, Canadian home buyers have had to endure two major changes to mortgage qualification rules. 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