Set to go into effect January 1, 2018, the new rules require borrowers to pass a “stress test” on their mortgages Simply put, borrowers are going to have to be able to afford the monthly payments if interest rates were 2 percent higher.

“The main effect will be felt by first-time buyers,” says James Laird, co-founder of Ratehub.ca. “No matter how much money they put down as a down payment, they will have to pass the stress test.” The effect of the changes will be huge, resulting in a 20% decrease in affordability, meaning a first-time homebuyer will be able to buy 20% less house, explains Laird.

How will this affect the sale of new condominiums in our markets? We think it will actually be a boost! People who can no longer qualify for a detached home, will turn to townhomes and condo suites for ownership.

Between soaring single home costs and the mortgage stress test, condominiums are destined to become the only viable ownership model in cities like Toronto.

And that’s good for business!

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