Rising interest rates mean that the tighter mortgage lending rules introduced earlier this year are no longer needed.
That’s according to Toronto-based Mattamy Homes which says the measures brought in to cool overheated housing markets have done their job but are now having a negative impact.
Mattamy, along with the Canadian Home Builders Association, is urging the government to relax lending rules to enable younger buyers to move forward with their homebuying ambitions.
“We’re going to continue to lobby for a pullback now on B-20,” Brad Carr, chief executive officer of Mattamy Homes Canada told Bloomberg. “That had a very targeted outcome. It’s been achieved so it’s kind of overkill now.”
David Foster of the CHBA added that markets that were already soft, such as Calgary, are getting “hammered” by the B-20 mortgage regulations that introduced stress tests for CMHC-backed loans.
The mortgage stress tests do not work for Alberta and several other regions in Canada. These tests, meant to cool the market in Toronto and Vancouver mean fewer people can enter the market and current owners are unable to sell. https://t.co/qufWU3pj3o #AbLeg— BILD Alberta (@BILDAlberta) November 19, 2018
Despite the pleas from builders, an OFSI spokesperson told Bloomberg that sound mortgage underwriting including consumer stress tests are important given “current risks and vulnerabilities”.