When the stress test was announced, headlines mentioned a lot of ‘price crashing’ and ‘drops’, really this is a great way to test out the banks to see if they can handle an economic failure. It shouldn’t be used to forecast any kind of real estate decision as it’s mostly geared towards the banks and not home owners. \n\n
While the announced stress-testing of the house prices by financial institutions sounds unnerving, it can be a boon. This is basically to see if the Canadian banks can withstand something like a market crash – something American banks couldn’t do during the 2008 financial crash.