I guess the best way to describe the changes the Government has put in place would be "killing a mosquito with a sledge hammer".
Yes, there were some issues that needed addressing, but they certainly did go too far. This was something that I, as well as the Mortgage Professionals of Canada (MPC) predicted from the very start. The Government of course did not consult MPC prior to implementing these rule changes.
I have heard rumours there could be some changes made as of March 19th, and the lead rumour is that they'll start allowing 30-year amortizations for first time buyers that are putting less than 20% down. Currently, 30 year ams are only allowed for those with more than 20% equity (not just first time buyers). I think this is a good start, but won't make a huge impact.
I said from the very beginning that the Stress Test was designed mainly to cool markets such as Toronto and Vancouver. With such a massive country and such different economies from province to province, their brush was far too wide. I don't know what it would look like, or how it would be done, but I would certainly be in favour of the stress test being either eliminated or reduced in certain provinces, such as AB. Ie - instead of qualifying at the Bank of Canada benchmark rate of 5.34%, perhaps in AB it would half a percent lower. Or for conventional mortgages, contract rate plus 1% as opposed to the contract + 2% it currently is.
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