Some of them sought out the rent 2 own option, but we could not really help them because, at the end of the day, we are also stuck to these policies if we want our clients to succeed.Which brings us to the second, and related, point. The world and Canadian economies are doing well, so interest rates keep rising. Rates have increased in four increments of ¼% each over the last year, with projections of another ½% increase between now and mid-winter.
One would think that with rising rates, the two percent gap of the stress test would be reduced and eventually not be needed. That has not yet happened. The result is that the value of homes people qualify for keeps decreasing with every rate increase. With incomes not rising in lock-step with those rates, it is taking many more out of home ownership, or forcing them to abandon their dreams of a single-family home in favour of a condo or a townhouse.
These policies have, to some extent, had their desired effect, that of dampening housing prices in areas where they were rising rapidly. While this may ameliorate the runaway housing price increases, for many it is too late. If prices had already risen by 50% over the previous years, a slight modification won’t get them back into the market.