New rules forcing home buyers to increase budgets, delay purchases
A recent RE/MAX survey conducted by Leger found that a growing proportion of Canadian homebuyers reported feeling pinched by the stress tests which came into effect January 2018.
However, the same survey also found that projections for the spring market showed optimism, with most markets expected to remain stable or improve.
“While the stress test did not impact Western Canada's major markets as much as other parts of the country, the foreign buyer’s tax and proposed speculation tax in B.C. have remained a concern for buyers,” RE/MAX of Western Canada regional executive vice president Elton Ash said.
“In recent weeks, the speculation tax has actually made some buyers hold off on purchasing which may affect the housing market in the next few months.”
According to the Leger survey, 4 in 10 buyers have had to compromise on their purchases, and almost 1 in 3 opted not to purchase altogether. 1 in 4 buyers compromised on the size of their home, while 18% sacrificed an ideal location for their home.
Despite these concessions, however, 55% of homebuyers indicated a belief that they can still purchase the type of home that suits their families’ needs, compared to 46% last year.
“The stress test, along with rising prices over the last two years, has contributed to the evolution of the Canadian homebuyer, and has prompted them to change their perceptions of ‘must-haves’ such as size and location,” RE/MAX INTEGRA Ontario-Atlantic Canada Region executive vice president and regional director Christopher Alexander said.
“Homebuyers impacted by regulatory changes beyond their control have adapted to the circumstances and still, more than half feel like they can purchase the right home to suit their needs.”
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