Real Estate

OSFI adjusts the stress test

  • Last Updated:
  • Apr 10th, 2021 7:25 pm
Sr. Member
Mar 14, 2018
898 posts
827 upvotes
kangarooz wrote: This is targeted more towards those 2m SFH as most condo investors put 20% down already. Precons for example are almost all 20%+ down on occupancy.
This is my feeling as well. And as you push the 2m buyers down below the 2m market now the 1m market will continue to heat up. And trickles all the way down to the condo market under 1m...

It's stupid as always. You just move the rich families to compete in a lower price market which will then move the lesser rich families down...and so on. In the end, the least affluent families will get priced out or have to take even more debt.
Deal Addict
Jan 9, 2010
2576 posts
2335 upvotes
clutch31 wrote: This is my feeling as well. And as you push the 2m buyers down below the 2m market now the 1m market will continue to heat up. And trickles all the way down to the condo market under 1m...

It's stupid as always. You just move the rich families to compete in a lower price market which will then move the lesser rich families down...and so on. In the end, the least affluent families will get priced out or have to take even more debt.
The issue is with supply, and that responsibility rests on the government, either through them building affordable housing or to provide incentives for the private sector to build. Not only are they not doing the former, all levels of government make it increasingly difficult and disincentivize the private sector from building by increasing red tape, taxes, levies, and development charges.

They're just absolving themselves of any responsibility and blaming others for their own failures.
Deal Expert
May 30, 2005
47587 posts
8194 upvotes
Richmond Hill
kangarooz wrote: This is targeted more towards those 2m SFH as most condo investors put 20% down already. Precons for example are almost all 20%+ down on occupancy.
Are you implying 2M+ SFH are not putting down 20% down? What happened to the argument that most 2M+ homes are being traded up with equity? The family would have to be making serious dough to quality for 2M+ with less than 20% down...
Sr. Member
Mar 14, 2018
898 posts
827 upvotes
Jon Lai wrote: Are you implying 2M+ SFH are not putting down 20% down? What happened to the argument that most 2M+ homes are being traded up with equity? The family would have to be making serious dough to quality for 2M+ with less than 20% down...
They can't put less than 20% down to purchase 2M+ homes. The cut off is 1M.
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User avatar
Apr 12, 2013
2900 posts
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Moon
Jon Lai wrote: Are you implying 2M+ SFH are not putting down 20% down? What happened to the argument that most 2M+ homes are being traded up with equity? The family would have to be making serious dough to quality for 2M+ with less than 20% down...
This is exactly what I mean, if you cant get someone who will buy your 1m unit, theres nothing to trade up to.

A move like this would only help put pressure on the lower end of the market. IE screw over the first time home buyers.
Koodo, Public Mobile, Lucky Mobile Customer
Deal Expert
May 30, 2005
47587 posts
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Richmond Hill
kangarooz wrote: This is exactly what I mean, if you cant get someone who will buy your 1m unit, theres nothing to trade up to.

A move like this would only help put pressure on the lower end of the market. IE screw over the first time home buyers.
Got it, interesting perspective, so there might be impact on both sides of 1M. Guess we'll see what happens. I wouldn't mind a compression in the 1-2M mark as I am looking to upsize myself and certainly wouldn't mind paying less to trade up even if it means I get less for my current property.
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User avatar
Apr 12, 2013
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Moon
Jon Lai wrote: Got it, interesting perspective, so there might be impact on both sides of 1M. Guess we'll see what happens. I wouldn't mind a compression in the 1-2M mark as I am looking to upsize myself and certainly wouldn't mind paying less to trade up even if it means I get less for my current property.
Yup, I agree with you, not looking to upsize myself but this policy would make it easier to move from a 500-700k property to a >1 million dollar property.
Koodo, Public Mobile, Lucky Mobile Customer
Deal Addict
Mar 30, 2017
1162 posts
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moofur wrote: The issue is with supply, and that responsibility rests on the government, either through them building affordable housing or to provide incentives for the private sector to build. Not only are they not doing the former, all levels of government make it increasingly difficult and disincentivize the private sector from building by increasing red tape, taxes, levies, and development charges.

They're just absolving themselves of any responsibility and blaming others for their own failures.
and leftist main stream media keep pushing the narration that it is the private sector doing all sort of evil things to make housing unaffordable. The worse thing is low-income renters and entry-level home buyers fall for it lol
profit on 6/23/2021 = 117.61% since 11/10/2020 to be exact😎
Newbie
Apr 10, 2018
91 posts
3 upvotes
Ontario
My understanding if you have sales agreement signed for pre-construction and pre-approved before Jun 1 and closing after Jun 1. You will not be impacted.
Sr. Member
Jun 2, 2017
761 posts
381 upvotes
osu101 wrote: My understanding if you have sales agreement signed for pre-construction and pre-approved before Jun 1 and closing after Jun 1. You will not be impacted.
What about for already built homes? Same treatment?
Newbie
Apr 10, 2018
91 posts
3 upvotes
Ontario
CEOofPopeyes wrote: What about for already built homes? Same treatment?
From ratespy.com

“ On Pre-Approvals

OSFI has provided welcome clarification on how its new stress test will affect people who buy a home before the new stress test’s June 1 implementation date. It told us today:

“If a mortgage is pre-approved before June 1, the new minimum qualifying rate does not apply, even if the sale doesn’t close until after June 1. However, there must also be a signed purchase and sale agreement.”

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