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Victoria home prices and housing values


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#2901 Casual Kev

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Posted 15 May 2019 - 09:19 PM

No, my point is government intervention almost always has unintended consequences.

 

I don't think the consequences were unintended at all. The whole point of the stress test was to keep people without the means to keep paying a mortgage through a downturn. And that class of people would obviously either aim lower or stick to renting to compensate. From the policymaker's perspective, that's much better than them going underwater and needing a whole lot more taxpayer money to be rescued or kept on income-tested assistance.



#2902 Mike K.

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Posted 16 May 2019 - 05:54 AM

No, see that’s not it either.

It has nothing to do with a downturn, rather a period of strong economic activity yielding much higher interest rates over a short period of time. The test was also not intended to drive down sales, but when your most important real estate markets have very high prices, the stress test literally kept people from buying. Not just reducing their expectations, but not being able to transition from renting to ownership.
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#2903 Casual Kev

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Posted 16 May 2019 - 09:18 PM

No, see that’s not it either.

It has nothing to do with a downturn, rather a period of strong economic activity yielding much higher interest rates over a short period of time. The test was also not intended to drive down sales, but when your most important real estate markets have very high prices, the stress test literally kept people from buying. Not just reducing their expectations, but not being able to transition from renting to ownership.

 

That's true, even fiscally responsible would-be homeowners are struggling to get in partially due to the stress test. But I suppose that's the inherit problem of the federal government setting the rules when it comes to credit when each city's housing market is affected differently.


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