This is how the new mortgage rules have impacted housing markets across the country.
“First-time home buyers looking to get into the market before having to face tougher mortgage eligibility criteria had only two weeks to do so following the Finance Minister’s announcement of tighter mortgage regulations in early October,” said Gregory Klump, CREA’s Chief Economist. “Early evidence suggests that the influence of tighter mortgage regulations on sales activity has been mixed.
“The federal government will no doubt want to monitor the effect of new mortgage regulations on the many varied housing markets across Canada and on the economy, particularly given the recent rise in uncertainty about economic growth prospects following the U.S. presidential election.”
According to CREA, home sales edged up 2.4% month-over-month in October.
Sales were up year-over-year in about 60% of all markets, according to the association, with strong activity in Toronto offsetting declines in Vancouver.
The national average home price jumped 5.9% year-over-year.
“While prices in 9 of the 11 markets tracked by the MLS HPI posted y-o-y gains in October, increases continue to vary widely among housing markets,” CREA said. “Greater Vancouver (+24. 8 percent) and the Fraser Valley (+32.5 percent) posted the largest y-o-y gains, although single family home prices in both of these markets are now off peak.
“Double-digit y-o-y percentage price gains were also registered in Greater Toronto (+19.7 percent), Victoria (+20.1 percent) and Vancouver Island (+15.8 percent).”
While it’s obvious the recently announced mortgage rules will impact markets across the country, CREA argues more time is needed to realize the full effect.
“The expanded stress-test for home buyers who need mortgage default insurance took effect in the middle of October,” said CREA President Cliff Iverson. “More time will need to pass before its effect on housing markets can be gauged. The extent to which they will push first-time home buyers to the sidelines may vary among housing markets.”