Sales increase in Canada ahead of tougher mortgage rules in January 2018
Housing sales in Canada edged upwards month on month in Canada between September and October while prices also increased, the latest index shows. While sales increased by 0.9% and it was the third monthly rise in a row, transactions are still almost 11% below the record level set in March 2017, according to the figures from the Canadian Real Estate Association (CREA).
The national average price for homes sold in October 2017 was just under $506,000, up 5% from one year earlier. The index report points out that the national average price is heavily skewed by sales in Greater Vancouver and Greater Toronto, two of Canada’s most active and expensive markets. Excluding these two markets from the calculations takes more than $120,000 from the national average price to just above $383,000.
The number of homes coming onto the market eased by 0.8% month on month following a jump of more than 5% in September. The national result was influenced most by declines in new supply in London-St. Thomas, Calgary and Greater Vancouver.
Activity in October was up from the previous month in about half of all local markets, led by the Greater Toronto Area (GTA) and the Fraser Valley, together with a number of housing markets in the Greater Golden Horseshoe region. Actual activity was down 4.3% in October 2017, extending year on year declines to seven consecutive months. Sales were down from year ago levels in slightly more than half of all local markets, led overwhelmingly by the GTA and nearby cities.
Sales could rise again before the end of the year, according to CREA president Andrew Peck. ‘Newly introduced mortgage regulations mean that starting 01 January all home buyers applying for a new mortgage will need to pass a stress test to qualify for mortgage financing,’ he explained. ‘This will likely influence some home buyers to purchase before the stress test comes into effect, especially in Canada’s pricier housing markets,’ he added.