In our latest consumer survey report – Consumers’ Perspectives on Homebuying in Canada –Chief Economist, Will Dunning, reveals that overall Canadians are feeling optimistic about the housing market and the economy and that the new government imposed stress test for insured mortgages is negatively impacting consumer and not decreasing levels of consumer debt in Canada.
The new report finds that exceptions to the national average are seen among new homebuyers (Next Generation) in the Greater Toronto Area (GTA) which are is influenced by both GTA and Vancouver market conditions. Next Generation homebuyers in these key regions have the highest stress levels around home purchasing decisions while those in Atlantic Canada and Quebec have the lowest.
The report found that because of the new stress test 48% of potential buyers expected their down payments to be less than the 20% required, which would make them subject to the stress test and 20% of these potential buyers would be unable to afford the financing required. Since almost one-half of homebuyers require mortgage insurance, these survey results indicate that a significant number of potential homebuyers in Canada will be negatively affected by the mortgage insurance stress test.