Cities like Calgary weren't exactly the impetus for the new federal mortgage stress test rules (*cough* Toronto/Vancouver *cough*) that took effect on New Year's Day, but they will be feeling its effects nonetheless. Where Calgary is concerned, residents should expect at least a modest fall in housing demand.
"We do expect this to cause some slowing in demand but not a significant amount," said Ann-Marie Lurie, chief economist at the Calgary Real Estate Board.
The reason for this is that a stress test lowers the range of options available to potential buyers. Even if they still have a demand for homes, they may be priced out of the homes that were initially within their means.
"If they were thinking they could get a $500,000 home and now they can no longer get that, they're going to have to consider all their alternatives," Lurie added.
Some change was already evident even before the Jan. 1 implementation date. Or rather, there was a pre-emptive response to what people knew was coming, according to Lurie.
"We went from a market that was really trending below long-term averages," she said. "After the announcement, we saw an increase in sales activity [in November and December]. There was nothing else that changed in that timeframe."
There was a similar effect in Ottawa, which experienced a 25 per cent year-over-year increase in housing sales this past November.
Kudos to those who managed to get a sale through before they were priced out of their preferred bracket, and best of luck to the rest of the market in still attaining theirs in 2018 and beyond.