Time for B-20 mortgage stress tests to 'go away': Mattamy Homes founder

Dated: March 18 2019

Views: 52

Time for B-20 mortgage stress tests to 'go away': Mattamy Homes founder

 

Mattamy Homes CEO Peter Gilgan expanding beyond real estate

  • Now Showing
    6:41

    Mattamy Homes CEO Peter Gilgan expanding beyond real estate

  • Up Next
    7:28

    B-20 needs to go and housing projects need to be approved faster:...

  • 5:40

    Canada needs to increase support for businesses to boost competit...

The founder of Canada’s largest residential homebuilder says it’s time for regulators to cut potential buyers some slack.

“Ownership is something that young Canadians aspire to, and I hear it all the time from people that they want to buy a house, they like the price that we’re able to offer them… but qualifying for that mortgage at two per cent over the actual rate is holding them back,” Mattamy Homes founder Peter Gilgan told BNN Bloomberg in an interview, referencing the B-20 mortgage stress tests that took effect at the start of 2018.  

“I think that [B-20] did a job, maybe a little too good a job of cooling the market. I think it’s time for [those stress tests] to go away.”

Gilgan’s comments echo a call from the Toronto Real Estate Board to reconsider the B-20 regulations. “The stress test should be reviewed and consideration should be given to bringing back 30-year amortizations for federally insured mortgages," said TREB President Garry Bhaura in a release on March 5.

The city’s average home price jumped just over $32,000 to $780,397 in February from the previous month, according to TREB data. The average cost of a Toronto home the month prior to B-20 taking effect was $735,021.

He chalked the supply-and-demand imbalance in the province up to years of the provincial government dragging its feet.

“It’s an attitude of, ‘Let’s not make a decision. Then we can’t get in trouble on a bureaucratic level. Let’s continue to ask for more, and more, and more information and play out all of the time we have’ rather than saying, ‘How can we help this organization bring this product to market?’” he said.

Gilgan – who announced on March 5 that he was getting into the investment business with the launch of Mattamy Asset Management – said the lag time between building and being able to sell properties has become “bizarre and quite pervasive.”

He called for more competition in the homebuilding space in efforts to get new homes to market quicker.

“Imagine if you have to hold an asset for another 10 or 15 years,” Gilgan said of having to sit on properties for years while awaiting regulatory decisions from the province. “Your costs of holding that asset are significant, and that affects the input costs that you have to put into pricing the house.”

“I love to compete ... Let’s create more competitiveness in the real estate economy. We all know what competition is going to do. It’s going to bring prices down into a more affordable zone for more young Canadians.”

Blog author image

Steven Axford

Steve is a award winning Realtor in Victoria BC, with his listings selling faster and for top dollar! Growing up in Victoria, BC and has always been active in his community. Steve is a Victoria Couga....

Latest Blog Posts

A greater commitment to development required to balance local housing market

October 1, 2021  A total of 761 properties sold in the Victoria Real Estate Board region this September, 23.1 per cent fewer than the 989 properties sold in September 2020 and 8.4 per cent

Read More

CMHC says annual pace of housing starts in Canada slowed in July

OTTAWA — Canada Mortgage and Housing Corp. says the annual pace of housing starts in July fell compared with June.The national housing agency says the annual pace of starts fell to 272

Read More

Victoria housing inventory continues to decline over summer months

August 3, 2021  A total of 835 properties sold in the Victoria Real Estate Board region this July, 14.7 per cent fewer than the 979 properties sold in July 2020 and 11.4 per cent fewer than the

Read More

Victoria's $100 million Customs House luxury condominium project nears completion

Three years after touring Victoria’s Customs House mixed-use condominium and retail offering during its interior de-construction, Citified is honoured to be the first media

Read More