Mortgage Professionals Canada, which represents mortgage brokers and others working in the industry, released a report this past summer stating that an estimated 100,000 Canadians have been prevented from entering the real estate market due to new stress tests.
One stress test was applied to insured mortgages starting in October 2016 while the other was imposed upon uninsured mortgages at the beginning of this year. The stress tests have been pinpointed as the main cause of the 12.5 percent drop in home sales in Canada in the first half of 2018, writes economist Will Dunning, who authored the report.
Many of the buyers who failed the test bought a cheaper home that was $28,750 less on average, Dunning stated. ◊