do reply RWZM logical message below 🙂

Realtors would love to remove all tests so that they can sell a million-dollar home to a guy with a $50000 annual salaries and let him go bankrupt next year if the interest rate rises.
I feel the government has failed in a big way by now being able to control the price rise as it’s a basic need of every person. They just becoming ostrich saying market driven but 0.05% interest is not from the market, its done by someone other than a common guy like me that triggered this disaster I feel. Just bring interest rates to 1.5% on savings account and let things settle down.

Bud… no they aren’t, have you not read all the posts and wild rants?

I’m not the one with a delusion for 12 years running with “the crash just around the corner”.

I personally hate the entire real estate industry and feel it should not be used as a financial asset. The only way this could ever happen is by removing bidding completely and make homes set price. Realtors would then have to price properly and you lose the bid/ask of a market investment. Problem would be solved in a week, at the cost of political suicide.

The solution will come not from within but from an external shock like a war courtesy of China or the US. Absent this, I don’t see how this debt bonanza will stop. Perhaps if there is inflation and rates rise, but this seems unlikely at the moment.

BUT, if the QE party keeps going, I’d probably stick w/ US equities. Not Canadian. Those are trash. Canada isn’t an industrious country.

If our tiny country can keep this dumpster fire of housing roaring, you can be sure the Americans will be keeping their markets roaring too. After all, who are we in the grand scheme of things?

I don’t dislike condos, I dislike the condos they’re building. If they built them like 1960s apartment buildings, but plus washer dryers and dishwashers, I’d love condos. What I don’t love is glass walls, “dens” instead of second bedrooms, glass INTERIOR walls and dumb amenities I’m never gonna use.

Bud. Most of the commenters are also professional forum users and are mostly homeowners already. Your assumption is jealousy, but in reality, we’re discussing the delusion people like you share.

Or maybe you’re right, I’m looking to upgrade from my 6,000 sqft home to an 8,000 sqft home. One day. If only the OSFI stress test that doesn’t apply to us was just removed. Then I could!

The issue is that the majority of commenters here are people that desperately want a detached house but don’t have the downpayment, and now likely couldn’t afford payments or would be strapped. You can especially tell because of their constant disdain and flaming of condos and how they’re trash and nobody wants them. So they’re likely people that were priced out waiting for a “crash” to buy a detached as they don’t like condos. They generally cycle through for a few years posting about the upcoming crash and eventually buy and disappear… even some of the most prominent posters like bluetheimpala finally threw in the towel and bought in 2017. Nothing you say will be listened to and the same comments will be parroted.

High housing costs are freezing young Canadians out, not stress tests. Also, banks have a responsibility to mitigate risk when lending, long and short-term.

“If you can afford what the bank is offering for the foreseeable future, who the heck knows what your life will bring in the coming 5 years!”

Wow…..too many ways to answer that one…..

All banks have requirements for lending…ie some sort of stress test. The question should be, to what degree should governments force banks to tighten their lending practices and what should that look like?

It is meant to be a cooling measure without an absolute collapse in housing (as we saw in the US in ’08). Leverage is great, when it’s managed, but if the majority of new homeowners today are stretching themselves financially to buy, you inherently risk the financial wellbeing of the entire mortgage market.

It is a well-known fact that Canadians spend more as a % of income on housing (both in terms of rent and ownership costs). Immigration is the narrative, which makes sense to a degree, but we also have lucrative, loophole investors (overseas and domestic) who invest on the premise of housing only going up. This is where a lot of the risk comes from, and why these measures are needed.

You may not write policy, but you definitely benefit from the brass that does — 10-15% of CDN GDP comes from housing transactions (sales, leases, etc.), the gov’t would be nuts not to protect it.

I will say that I agree with the no stress-testing on renewals bit though. The lender qualified you on the mortgage. 5 years later they deny a renewal even if you’ve got a spotless record of making your payments every month, based on some ratio? No, that’s just silly. In fact, that could precipitate a crisis. The only correct regulation is one that keeps marginal buyers out in the first place. Once the bank approves the loan, they should be stuck with is until default. And if they package and sell that loan to someone else, well then that someone else should purchase these things with open eyes.