Statement from CEO Tim Hudak on Bank of Canada interest rate increase

“A Bank of Canada rate hike will increase the costs of new mortgages and home equity lines of credit. With this increase in interest rates and the recent Ontario Government Fair Housing Plan, governments need to be very cautious about the cumulative impact of intervention in the housing market going forward. With both sales and prices slipping recently in the GTA, federal, provincial and municipal governments should think carefully about further measures to reduce demand for housing.

Recently, new mortgage stress tests for all uninsured mortgages have been floated by the Office of the Superintendent of Financial Institutions (OSFI). That would be on top of the mortgage stress test announced last fall that requires any home buyer applying for an insured mortgage to qualify at a higher rate. Toronto increased the land transfer tax in 2017. There’s speculation that the federal government might change or eliminate the capital gains tax exemption on principal residences, reducing an owner’s profit on the sale of their home.

It’s time for governments to hit the pause button on more demand side policy interventions and take a wait and see approach.

Ontario REALTORS® would like to see governments put more focus on bringing more supply into the market, specifically ‘missing middle’ type housing like townhomes, stacked townhomes and duplexes and speeding up the housing approvals process. The best long-term solution to give growing families and millennials a shot at affordable home ownership is to increase housing supply and choice in the marketplace.”

- Tim Hudak, CEO for the Ontario Real Estate Association

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About the Ontario Real Estate Association
The Ontario Real Estate Association represents 70,000 brokers and salespeople who are members of the 39 real estate boards throughout the province. OREA serves its REALTOR® members through a wide variety of professional publications, educational programs, advocacy, and other services. www.OREA.com.