Mortgage rules bring uncertainty, CREA says

OTTAWA— The federal government’s recent changes to mortgage lending have injected uncertainty into the real estate market, the president of the Canadian Real Estate Association said Friday.

The measures — which include an expansion of stress test provisions that take effect Monday — could deter first-time homebuyers, said Cliff Iverson, who represents more than 100,000 real estate brokers across the country.

“The finance minister’s recent changes to regulations affecting mortgage lending has added to housing market uncertainty among buy- ers and sellers,” Iverson said in a news release.

“For first-time home buyers, the stress test for those who need mortgage default insurance will cause them to rethink how much home they can afford to buy.”

Gregory Klump, CREA’s chief economist, said the effects on first-time homebuyers will likely trickle down into other segments of the housing market.

“First-time home buyers support a cascade of other homes changing hands, making them the linchpin of the housing market,” Klump said in the same statement.

“The federal government will no doubt want to monitor the effect of new regulations on the many varied housing markets across Canada and on the economy, particularly given the uncertain outlook for other private sector engines of economic growth.”

CREA’s comments came as it released figures for home sales last month, which saw a 0.8-per-cent increase nationally compared to August. Compared with a year ago, the number of home sales was up 4.2 per cent from September 2015.

Home sales in the Toronto region rose while they continued to fall in and around British Columbia’s Lower Mainland region.