August in Toronto was the slowest month in more than two years for new home sales, according to numbers released Monday and hinting at the effects of tighter mortgage rules. Still, it's one segment of the market brokers aren't too worried about, given historically low penetration rates with new construction.
“August was the first full month with the new rules in place and it appears these regulations have affected consumer confidence, resulting in significantly reduced sales of new homes," said Bryan Tuckey, president of the Building Industry and Land Development Association (BILD). "BILD will be carefully monitoring new home sales during the next three months to see if this decline becomes a trend."
The 1,242 now houses and condos sold throughout the GTA in August 2012 represent the slowest August on record with the association and the smallest number of sales since 2009.
The drop provides the latest statistical corroboration that the move to lower the amortization ceiling for insured mortgages has had a chilling effect on the market.
That slowdown has been more acutely felt by the banks than brokers, although the latter enjoys a larger share of the new condo market than mortgages for new houses.
Still, the numbers respresent a weakened consumer confidence, according to BILD -- something of concern to all real estate professionals.
"Confidence in the new homes market is crucial to a healthy economy in the GTA," added BILD Chair Paul Golini Jr. "This industry employs more than 193,000 people, making it one of the largest contributors to economic growth in Ontario."