The Office of the Superintendent of Financial Institutions maintained that the stricter regulatory regime governing mortgage lending is the most logical and prudent approach to safeguard against possible systemic risks.
Federal-level changes to mortgage rules in recent years – and especially the stress tests introduced at the beginning of 2018 – have been blamed by various quarters for weakening sales, which was especially apparent in Toronto and Vancouver as they saw their worst year for sales in at least 10 years.
However, Carolyn Rogers of the OSFI assured that the agency will continue to keep an eye on the market, especially since the answer to the affordability crisis can’t be taking on more debt.
“OSFI monitors the environment on a continual basis and when we determine that adjustments to our standards and guidelines are warranted, we make them,” Rogers said earlier this week in a Toronto speech, as quoted by Bloomberg.
Read more: Calgary Councillor urges devolution of mortgage rules
The market conditions fostered by the current mortgage rules have proven most troublesome for first-time buyers, Mortgage Professionals Canada CEO Paul Taylor stated.
“If we continue to force those folks to rent, they’re going to see continuing escalating costs and the average Canadian is going to be a whole lot worse off in a decade,” he warned, adding that the OSFI should revise the rate for stress tests to 75 basis points.
Taylor noted that now might be the right time for the government to ease up some. “There’s a lot of folks that just don’t qualify to purchase anymore at the bottom end of that ladder.”
Housing policies that would help a greater number of Canada’s young adults afford homes will most likely win votes from the demographic that would account for 1 of 3 voters this year, Abacus Data CEO David Coletto said in late January.
“There’s a passion and an intensity about this issue with younger people,” Coletto told The Canadian Press.