Why it's important to track the number of Canadians abroad
Easing Canada’s mortgage stress tests will not have a material impact on Canada’s hottest housing markets, according to CIBC’s deputy chief economist.
“It’s not a significant change by any stretch of the imagination,” Benjamin Tal told BNN Bloomberg in an interview on Friday.
“I think that B-20 was necessary. It was important because we needed to save some Canadians from themselves.”
Finance Minister Bill Morneau announced on Tuesday that the federal government is changing how it calculates qualifying rates for insured mortgages, which are often taken out by first-time homebuyers who put down less than 20 per cent as a down payment. The new rules are set to kick in on April 6.
The country’s banking regulator, OSFI, is also looking at changing the stress test for uninsured mortgages.
When you do that math, the qualifying rate to pass the stress test will come down by about 30 basis points – a change mortgage market watchers says will give potential homeowners about three per cent more buying power.
“What’s happening is a 20 (or) 30 basis-point difference,” said Tal.
“That will not change the trajectory of the Toronto or Vancouver housing market.”