Alberta politicians at both the provincial and municipal level have recently spoken out against Canada’s mortgage stress test.
First, United Conservative Party leader Jason Kenney told REALTORS® at CREB®’s annual forecast event on Jan. 30 that his party would call on Ottawa to eliminate the mortgage stress test if elected.
Then a notice of motion brought forward by Ward 5 Coun. George Chahal, which called for the mayor to ask the federal government to review the stress test and how it is applied, was passed unanimously by city council. Chahal says the federal government should tailor the policy to regional market conditions.
“I’m concerned about the dreams and aspirations of homebuyers.” – George Chahal, Ward 5 councillor
“Over the last year, we’ve seen a significant impact of the stress test on our local market and we’ve seen a significant decline in the local real estate market, (including) significant job losses and layoffs in the construction sector over the course of the year, and I think there’s more to come,” he said.
“I’m concerned about the dreams and aspirations of homebuyers. … There may be no better time to purchase a home in the marketplace than today, with low interest rates and with housing prices that are quite affordable compared to many other major cities in Canada.”
The stress test was implemented over a year ago to ensure homebuyers could still afford to pay for their mortgage if interest rates rose. It was a measure designed to address high debt levels among Canadians, and many experts say its main targets were the hot real estate markets in Toronto and Vancouver. But the effects have been felt across the country, with many economists and housing-market experts agreeing that MLS® System sales have been impacted since the test came into effect.
“BILD Calgary Region wholeheartedly supports this motion and applauds Calgary city council on taking these steps to ensure our region is in the best competitive position to attract both investment and residents to our city, while improving our tax base,” said Brian Hahn, CEO of BILD Calgary Region.
James Cuddy, senior market analyst with Canada Mortgage and Housing Corp., said the mortgage stress test has had an impact on the housing market in Calgary, but other factors have also played into lower demand here, such as continued uncertainty in the economy and higher interest rates.