Alexandra Posadzki and staff writers
The Canadian Real Estate Association says sales of existing homes rose by eight per cent last month compared to a year ago, while the national average home price soared 17 per cent.
CREA says the national average home price was $470,297 in January, fuelled largely by price gains in greater Vancouver and greater Toronto.
However, excluding the piping hot markets of Ontario and British Columbia, the average sale price actually edged lower by 0.3 per cent from a year ago to $286,911.
On a month-to-month, seasonally adjusted basis, CREA says national home sales rose 0.5 per cent in January, compared to December of last year.
Meanwhile, the number of new listings on the Multiple Listing Service declined by 4.9 per cent in January, compared to December.
CREA chief economist Gregory Klump said single-family homes remained in high demand in Toronto and Vancouver last month, while a number of Alberta markets continued to see ample supply while potential buyers sat on the sidelines.
``Tighter mortgage regulations that take effect in February may shrink the pool of prospective homebuyers who qualify for mortgage financing and cause national sales activity to ease in the months ahead,'' Klump said.
New federal rules requiring Canadians to put down larger down payments on homes that cost between $500,000 and $1 million took effect Monday. Homebuyers in Canada now face larger down payment requirements for properties over $500,000. The changes are intended to temper some of Canada's heated real estate markets.
Here are five things to know about the new rules:
Cough up the cash: Homebuyers now have to put at least a down payment of 10 per cent on the portion of the price of a home over $500,000. For anyone buying a home for $700,000 - a common list price in Vancouver and Toronto - that means the minimum down payment will rise to $45,000 from $35,000. Any home under $500,000 still requires only a down payment of five per cent.
Who's affected: Primarily those shopping for a home in Toronto and Vancouver. First-time buyers in those cities will feel the pinch since they'll be required to put down bigger down payments to get into the market. Those selling their homes in order to size up, especially in cities with hot housing markets, likely won't feel the pain since they've built up equity in those properties. To check the median home price in any given suburb check out Canadian Real Estate Wealth’s suburb tool here
Impact: The influence the new rules will have over house prices is expected to be small, experts say, given their narrow reach. When he announced the changes in December, Finance Minister Bill Morneau said they are expected to affect one per cent or less of the real estate market.
Sales activity: Some analysts expected a surge in sales leading up to Monday's changes, saying they would lure homebuyers who wanted to avoid making the bigger down payments. Royal LePage CEO Phil Soper says sales activity has been ``boisterous'' in Ontario, B.C. and Quebec in the first five weeks of this year, but he credits a relatively mild winter and low mortgage rates.
Past measures: Four rounds of changes were made to tighten eligibility rules for new insurable loans between 2008 and 2012. Among them: the minimum down payment was increased to five per cent, the maximum amortization period was reduced in stages to 25 years from 40 years and the maximum insurable house price was limited to below $1 million.
With files from Canadian Press