Recent changes to mortgage regulations have negatively impacted first-time buyers and there should be a pause on further measures, the CEO of Genworth said Monday.
Stuart Levings was appearing as a witness at the Standing Committee of the Finance Department as part of its study of the Canadian Real Estate Market and Home Ownership.
He said that the changes made to date “largely targeted aspiring first-time buyers, making it harder for them to gain a foothold in the housing market today.” This group, Mr Levings said, was not the problem and added that insured first-time buyers are the “most tightly regulated, rigorously underwritten borrowers in the market today.”
The Genworth chief said that the policy changes that targeted the strong markets of Vancouver and Toronto has also impacted others including Calgary which “was already under pressure and didn’t need any additional cooling.”
He also pointed out that the changes only affected a relatively small percentage of those in Vancouver and Toronto and therefore had little impact on rising prices. Mr Levings said that local measures may be more effective, citing the foreign buyers’ tax in Vancouver.
In conclusion, he called on the federal government to pause before making more changes; modify the stress test to better reflect rate expectations; scrap plans for a risk-sharing model; and work with all levels of government to study and address local housing issues.