Back to Blog
13 Feb

The mortgage stress test is making housing supply issues worse — and making homes even more unaffordable

Mortgage Facts & Stats

Posted by: Garth Chapman

With a growing number of first-time homebuyers frozen out of the market by the stress test, many builders have cut back on building.

Governments bear much of the blame for this undesirable market imbalance, as a narrow focus on suppressing household debt has dominated the policy mix while the root causes of undersupply — including excessive red tape, fees, taxes and nimbyism — have gone largely unaddressed.

If we want to address housing affordability in Canada, governments need to redesign the policy mix to confront these factors. For its part, the federal government could start by developing a more nuanced mortgage “stress test.”

First, consider mortgage debt in the Canadian context. More here