Government policy continues to hinder home sale activity. The federal government’s mortgage stress test has reduced buyers’ purchasing power by about 20 per cent, which is causing people at the entry-level side of the market to struggle to secure financing. Suppressing housing activity through government policy not only reduces home sales, it harms the job market, economic growth and creates pent-up demand.
There are more homes for sale in our market today than we have seen since October 2014. This trend is more about reduced demand than increased supply. The number of new listings coming on the market each month are consistent with our long-term averages. It is the reduced sales activity that is allowing listings to accumulate.