The body representing real estate agents in BC is urging the federal government to review the B-20 mortgage guidelines and the stress test in particular.
British Columbia Real Estate Association says that the requirements of the rules are negatively affecting housing affordability in the province and harming the ability of credit-worth British Columbians to own their own home.
“We would like to see a review and reconsideration of the current mortgage underwriting ‘stress test,’ as well as a return to 30-year amortizations for federally insured mortgages,” says BCREA chief executive officer Darlene Hyde. “These rules must be changed now before BC families are left further behind.”
Although the B-20 stress test provision has led to an 18% drop in home sales nationwide, it has hit Vancouver the hardest with a 45% decline since the rule was introduced. In Toronto sales were down 25%.
“The B-20 stress test is also having a negative impact on homeowner equity, family spending and the housing stock itself,” adds Hyde. “There’s a knock-on effect to the overall economy as families who are worried about declining home equity cut back on retail spending, home renovations and other products and services.”
BCREA warns that as housing demand weakens, builders pull back from the market, with a resulting supply crunch down the road.
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