The stress test is back in the crosshairs of industry analysts.

Earlier this week, CIBC World Markets Deputy Economist Benjamin Tal released a report that attributed an 8% drop in mortgage originations from 2017 to 2018 directly to the federal government’s stress test rules (B-20), which took effect on January 1, 2018.

That translates into a $13-$15 billion drop in lending activity in 2018 attributable directly to the stress test. Overall, activity was down about $25 billion from 2017, with the difference attributed to rising interest rates and lack of affordability in the country’s key markets.

Tal notes that B-20’s impact on driving down originations was due to fewer borrowers, which was down 4.9%, as opposed to smaller average mortgages. The stress test requires that borrowers qualify at a rate 200+ bps higher than their contract rate.

Here are some of the highlights from Tal’s report:

Tal’s conclusion? “Regulators should revisit B-20. We need a more flexible benchmark, potentially a narrower spread over the contract rate when interest rates approach cyclical peak, and perhaps to establish a reasonable floor under which the qualifying rate will never drop below.”

Here are some of the other key headlines from recent weeks:

Stress test creating pent-up housing demand, says BCREA

The British Columbia Real Estate Association (BCREA) came out with its own report taking aim at the stress test.

It says the province recorded just 5,707 sales in March, down 23% compared to a year ago, while the average price was down 5.4% to $687,720.

“B.C. home sales continue to be adversely impacted by federal mortgage policy,” said BCREA Chief Economist Cameron Muir.

“The sharp erosion of affordability caused by the B-20 stress test is now creating pent-up demand, as many would-be homebuyers are forced to wait on the sidelines,” he added. “Unfortunately, new home construction is slowing as well, which will likely lead to another housing supply crunch down the road.”

Toronto, Vancouver among 15-most-expensive markets in the world

For the second year in a row, Vancouver ranked as the fourth-most-expensive housing market in the world in the CBRE Global Living 2019 report.

With an average price of $1,090,000, according to the report, Vancouver is more expensive than New York, London, Beijing and Paris.

The only markets more expensive are Hong Kong, with an average property price of $1,650,315, Singapore and Shanghai.

Toronto, meanwhile, ranked as the 12th-most-expensive housing market of the 35 global markets analyzed in the report with an average property price of $768,972.

“Last year, some of the best performing cities were New York, Los Angeles, Toronto, Vancouver, Sydney and Melbourne,” the report noted. “With these markets now suffering from increasing affordability constraints, they have been pushed down the list, making room for European cities where house price growth is still robust.”

Ottawa, Montreal house price growth outpacing other markets

In contrast to a sharp slowdown in Vancouver’s housing market and a more moderate decline in Toronto, the housing markets in Ottawa and Montreal are on a tear.

Average home prices rose 7.7% year-over-year in the first quarter of 2019, according to the Royal LePage House Price Survey. With forecasted price growth of 2.8% in Q2, Ottawa is pegged to have the strongest price growth of any market.

In Montreal, home prices rose 5.5% year-over-year in Q1 to $406,332, driven by the province’s robust economy and unemployment rate of just 5.3%.

CMHC declares dividend

The Canada Mortgage and Housing Corporation (CMHC) announced its first-quarter dividend payment to the Government of Canada in the amount of $505 million.

In 2018, CMHC declared a total of $4.175 billion in dividends for the whole year.

CMHC makes regular and special dividend payments to its shareholder, the government, with the largest sum paid to date being a $4-billion special payment made in June 2017.