A federal policy meant to address overheated housing markets in Toronto and Vancouver introduced one year ago has significantly impacted the housing market right here in Manitoba.

On Jan. 1, 2018, Canada’s banking regulator, the Office of the Superintendent of Financial Institutions, introduced a new minimum qualifying rate — or “stress test” — to all homebuyers, including those with down payments of 20 per cent or more.

The rules effectively reduced the size of the mortgage Canadians are able to take on given a certain down payment and income.

While the primary focus of this Canada-wide policy was to cool off the housing markets in Vancouver and Toronto, the stress-test impacts have been felt right across the country over the past year.

According to Altus Group’s November 2018 housing report, outstanding residential mortgage debt in Canada grew by $47 billion for a 12-month period ending November 2018. This is down from $75 billion in the previous 12 months.

According to Altus Group, it was also the lowest dollar growth in 15 years.

The report states that on a percentage basis, the 12 months from November 2017 and November 2018 had the second-lowest growth rate since the Bank of Canada coverage started in 1969.

Altus Group’s report also identifies the stress test factored in a decline in the average price of homes that sold and a shift to larger down-payment ratios in 2018.

The stress test’s impact on consumer behaviour was also a factor in a decline in residential investment, as the marketplace adjusted to quickly changing consumer demand over the past year.

According to Statistics Canada, investment in residential construction between November 2017 and November 2018 decreased by 2.2 per cent nationally. However, the impact was much more drastic in Manitoba, where investment in residential construction fell by nine per cent. Only Alberta saw a larger decrease in residential construction investment over that 12-month period.

The market also saw a shift in the type of homes people were able to purchase. Statistics Canada reported investment in single detached homes declined by 20.1 per cent in that time, while investment in rental apartments rose by over 20 per cent. Investment in row housing declined by more than 14 per cent, while investment in semi-detached homes stayed relatively flat.

This significant and quick shift away from home-ownership options and toward investing in the rental market signals more than just a simple change in market tastes over the past year. This type of dramatic shift likely indicates that during 2018, more Canadians found the goal of home ownership out of their reach.

As interest rates increase, the calls for the federal government to rethink the mortgage stress test will likely grow stronger from Canadians looking at becoming new homeowners.