The real estate market in Canada has been heating up with bidding wars going on around the country. It has prompted increasing calls on the government to do something about the climate of unaffordable housing.
Giving Up On Home Ownership
More Canadians today continue to give up on the idea of home ownership because it is continually exceeding their affordability.
When people feel as if they will never be able to move up and afford home then that comes with a lot of depression and anxiety for many. We have seen various steps taken by the government in the past to deal with this issue.
We have seen vacant tax legislation introduced, as well as rules changed for minimum down payment requirements in the past.
However, despite those “solutions” that have been introduced to cool the market we can see that today we are still facing an issue of unaffordability.
Vancouver is still one of the most expensive cities in the world to live. The cost of living continues to get worse for millions in B.C. who struggle with 30-50% of their income just going toward housing costs alone. Most of those Canadians who are currently working toward buying their own home are saving hundreds of dollars each month.
Meanwhile, the prices on those homes in the market might be climbing faster than they can keep up with.
Now, legislators in Canada have come up with another plan to help the situation and they think that means introducing a new mortgage stress test for buyers. But critics say this is only going to make it that much harder for first-time buyers to get into the market.
The New Mortgage Stress Test Comes Into Effect June 1
Those new changes are expected to come into effect on June 1. And the new requirement will reportedly be testing whether or not borrowers would be able to afford payments should they see an increase in interest rates to a certain extent.
Is this going to be enough to drastically change the problem that many Canadians are facing of unaffordable housing? One thing it doesn’t touch on is the supply issue for homes in the country.
Sooner or later the problem of affordable housing in Vancouver and around Canada needs to be dealt with in a real and meaningful way. If it isn’t then we can expect that this could easily have severely negative consequences for the country and the future of Canadians.