More than one in four Canadian homebuyers report feeling pinched by the mortgage stress test regulations, says a recent Re/Max survey conducted by Leger. But Re/Max says projections for the spring market are optimistic with most markets expected to remain stable or improve.

“While the stress test did not impact Western Canada’s major markets as much as other parts of the country, the foreign buyer’s tax and proposed speculation tax in B.C. have remained a concern for buyers,” says Elton Ash, regional EVP, Re/Max of Western Canada. “In recent weeks, the speculation tax has actually made some buyers hold off on purchasing, which may affect the housing market in the next few months.”



Re/Max says government intervention and the stress test will continue to play a pivotal role in purchasing behaviour as we look to the months ahead. The Leger survey found that four in 10 buyers have had to compromise on their purchase, and almost one in three opted not to purchase altogether. One-quarter of buyers compromised on the size of their home, while 18 per cent made concessions on the location of their home.

Despite these compromises, 55 per cent of homebuyers say they feel like they can purchase the type of home that suits their families’ needs compared to 46 per cent last year.

“The stress test, along with rising prices over the last two years, has contributed to the evolution of the Canadian homebuyer, and has prompted them to change their perceptions of ‘must-haves’ such as size and location,” says Christopher Alexander, EVP and regional director, Re/Max Integra Ontario-Atlantic Canada Region. “Homebuyers impacted by regulatory changes beyond their control have adapted to the circumstances and still, more than half feel like they can purchase the right home to suit their needs.”

Re/Max says despite all the factors involved, the spring market across most of the country is forecasted to strengthen as we head into the warmer months. Supply is still low in many markets, and while the prices may not reach the same levels as this time last year, healthy price appreciation from the earlier months of this year is expected across many regions, the company says.

5 COMMENTS

  1. What are the analytics of this survey? I’d be curious to know what centers, what demographics, and how many participants there were. Thanks!

    • Re/Max says: A survey of 1574 Canadians was completed online between March 12-15, 2018 using Leger’s online panel, LegerWeb. Leger’s online panel has more than 400,000 members nationally and has a retention rate of 90%. A probability sample of the same size would yield a margin of error of +/- 2.5%, 19 times out of 20.

      Jim Adair REM editor

  2. What people don’t realize is this stress test has done the opposite of what it was suppose to. The Stress test has created more unaffordable housing. This Stress test has just increased the prices of lower end homes. If someone could afford a $600,000 house now they can only afford a $500,000.00 home if they could afford a $550,000 home now they can only afford at $475,000 home and so forth. Now the demand on the affordable homes has just increased hence making it less affordable to own a home unless you are rich. Great Planning on the government to create affordable housing. NOT!!

  3. Affordable apartment rentals are in short supply and a large part of the rental demand is the retired aging 70 + market wishing to sell and rent for their remaining years .
    These seniors are being thrown under the bus by the economy and do not deserve this “punishment”.
    Much of the rental problem is caused in small towns from zoning
    by -laws with height restrictions that discourage builders due to ability to any decent short term or even long term profit, while in big cities the lack of such profit is land costs and infill construction which can double construction costs.
    The “renter” is then left to search for a rental property with two possibility of the owner reclaiming the property for their own or a relative’s use.
    GOVERNMENT INCENTIVES to builders might be the answer to this escalating problem.

  4. The stress test was introduced precisely for this reason – to slow down the speculation in housing. While this doesn’t bode well for realtors perhaps, the government is doing the right thing for a change. Canadians have the highest debt load versus income in Canadian history. It’s a shadow of what happened in 2009 America. Stopping Canadians from over leveraging may hurt housing sales but with housing availability also reaching the lowest levels in living memory, at least this stopgap measure will slow down the real estate speculation.

    The real issue is what the government is doing about creating incentives for investors to start building for-sale and rental housing.

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