Toronto’s condo market is taking it on the chin, though that compares to a strong 2011.

Condominium sales in Canada’s biggest city plunged 30 per cent in the third quarter from the second, leading developers to delay launching projects, Urbanation Inc. said today.

Sales of new condos fell to 3,317 in the latest quarter, the research firm said. In the first nine months of the year, sales slipped to 14,156, and are on track to close out the year with a 35-per-cent decline from last year’s record level of 28,190.

“With slowing sales and a record level of unsold inventory in the market in the second quarter, condominium developers reacted quickly by delaying their project launches, especially in the ‘416’ area,” said executive vice-president Ben Myers, referring to one of the area codes used in the Toronto area, the other being further from the city core.

“Just five projects launched in Toronto in Q3-2012, as developers choose to review their pricing assumptions and unit mix.”

Resales also sank in the third quarter, by 32 per cent to 3,413 from 5,050 in the second quarter.

“The change in the mortgage insurance rules may have forced many buyers to settle for smaller units then they had previously desired,” Mr. Myers said, referring to the latest round of restrictions from Finance Minister Jim Flaherty that took effect in July.

“The number of resale transactions for units priced over $400,000 fell 40 per cent compared to last quarter, while there was a 38-per-cent quarterly drop in units traded over 1,000 square feet.”

Slowing sales in the city, where observers, including the finance minister, feared a condo bubble, are taking their toll on projects.

“The number of unit completions in 2012 are well below our forecasts, as construction delays have pushed back occupancy on a number of projects,” said Mr. Myers.

“The average project that completed construction in 2012 took 3.85 years from sales launch to occupancy. Compare that to 2003, when they average took just 2.68 years for a similarly sized project (205 units vs. 197 units).”

Unsold inventory in the city had reached a record 18,123 in the second quarter, but that has since slipped to 17,182.

And, noted Urbanation, starts have eclipsed completions for the eighth quarter in row, leaving a record 207 projects, with more than 56,300 units, under construction.

“The 28,000-plus completions next year could add as many as 14,000 new condominium rental units to the Toronto [census metropolitan area] via private landlords, which would represent a whopping 25-per-cent increase in condominium rentals in the metropolitan area,” it added.

Source: Michael Babad, Globe and Mail

Bank of Canada governor Mark Carney is suggesting interest rates will likely rise before the end of 2014.

It’s one of the clearest indications Carney has given as to when he might raise the bank’s key benchmark, which has been held at one per cent for more than two years.

Responding to a question in the Commons finance committee Tuesday afternoon, the bank governor said the bank’s current thinking was that monetary policy will need to be tightened before 2015.

Last week, Carney inserted the phrase “over time” to give markets guidance on when the bank’s trendsetting rate might be increased. Tuesday’s response was somewhat more detailed, but still pointed to no immediate plans.

“We have in this projection … some modest withdrawal of monetary policy stimulus over the course of the projection, which runs until the end of 2014,” he said. “In other words in advance of 2015.”

Carney added that whenever he does move, it will be when global and domestic factors dictate. And he reiterated his recent guidance that he will also take into account household debt in his decision.

At the moment, he said the country still needs super-low interest rates to stimulate the economy and create jobs.

Canada may have recovered all the jobs it lost in the recession, and added an additional 380,000, he said, but the economy still has a way to go before returning to what would be considered full employment.

“We are in still in position where there are more Canadians who want to work than are working, and the level of involuntary part-time (workers) is still elevated,” he explained.

“They illustrate a degree of slack that still exist in the labour market, which is one reason our monetary policy continues to be and should be accommodative.”

Most private sector economists have pencilled in late 2013 or early 2014 for the first bank action.

The bank governor was appearing before the committee to explain his latest economic outlook released last week that projected growth of 2.2 per cent for this year, followed by a 2.3 per cent advance in 2013 and 2.4 in 2014.

That is slightly more optimistic than the economists’ consensus estimate handed to Finance Minister Jim Flaherty on Monday for the government’s fall update projections, which will be released in a few weeks.

Carney continued to blame global factors for most of the drag on the economy. But he said government restraint is also contributing to slower growth, although not as much as some have suggested.

He estimated the public sector will contribute about 0.3 percentage points to growth in 2013 and 2014. That’s about half the historic level and well down from when Ottawa and provincial governments were pumping billions into the economy during the 2008-09 recession and early stages of the recovery.

“So it’s positive but not as much as previously,” he said. Government restraint was a modest 0.2 percentage point constraint in 2012, however, the bank report shows.

Carney even ventured to assess the economic impact of the destruction caused by superstorm Sandy, which early estimates put at $20 billion.

While the economy will take a hit immediately, over the long term needed reconstruction in the eastern U.S. states will largely recoup the losses.

“There are activities that can never be redone, for instance a visit to a restaurant. Then there is restructuring (which creates economic activity). In general, it tends to be a relatively negligible impact over time,” he said.

Source: Julian Beltrame, Canadian Press

Homeowners in the Greater Toronto Area, Calgary and Vancouver are outpacing the national average when it comes to their intentions of buying a property within five years, according to the first BMO Housing Confidence Report released Tuesday.

Intentions to buy in the Greater Toronto Area (57 per cent), Calgary (62 per cent) and Vancouver (53 per cent) were above the national average (46 per cent).

Also, homeowners in Canada expect prices to rise by 2.0 per cent over the next year while those in Calgary expect an increase of 2.4 per cent.

“The fact that 46 per cent of Canadian homeowners intend to buy a property in the next five years implies that Canadians are feeling confident in the current real estate market environment,” said Martin Nel, vice-president of lending and investments with BMO Bank of Montreal. “However, that certainty is tempered, given the adverse effect moderate increases in home prices and mortgage costs would have on the average homeowner.”

“Rising debt and elevated house prices have increased the vulnerability of a meaningful number of households, and their financial situation will worsen if interest rates increase even moderately,” added Sal Guatieri, senior economist with BMO Capital Markets. “With rates likely to remain low for some time, the recent tightening in mortgage rules will help to cool credit growth and the housing market.”

The BMO report also revealed: 18 per cent plan to downsize to a smaller home and the same percentage intends to up-size to a larger home; 10 per cent plan to sell their home and move in to a rental property, retirement community, or move in with family in the same time period; 21 per cent plan to purchase an additional property for income, investment, or recreation; 57 per cent are familiar with the new mortgage regulations introduced earlier in 2012; 22 per cent say they are less likely to buy a new home in the next five years because of the changes; and 29 per cent planning to buy in the next five years say that they are likely to spend less on a new home as a result of the new rules.

Nationally, intentions to buy drop significantly from 46 per cent to 36 per cent in the event of a five per cent increase in home prices. In Alberta, a five per cent increase would change intent to buy by only one per cent; however, a 10 per cent increase would lower intent by nine per cent, moving from 51 per cent to 42 per cent.

Source: Mario Toneguzzi, Calgary Herald

A slowdown in real estate sales numbers in Vancouver, particularly in single-family homes worth more than $1 million, dragged down the country’s average home price in September, the Canadian Real Estate Association said Monday.

In Metro Vancouver, the average home price was down 3.8 per cent in September from a year earlier, which CREA said skews the national average price, which was up 1.1 per cent. Excluding Vancouver, the national average price was up 3.4 per cent from a year ago.

Gregory Klump, CREA’s chief economist, said the drop in Vancouver was caused by fewer really expensive sales this year compared to last year.

“Last year, the average was pitched higher by a whole bunch of high-priced sales, while this year, those sales haven’t recurred so it’s lower. You’ve got one that was stretched last year, and one that’s been shrunk this year by a change in the composition that makes up the average” Klump said. “I like to use the following analogy: If you line the kids up in class from shortest to tallest and take the average height, and then you excuse the 10 tallest kids and recalculate the average, then the average height will have shrunk, but none of the kids have.”

For this reason, average house prices are not the most consistent information to use, Klump said.

“It’s like looking in a funhouse mirror,” Klump said. “It doesn’t really give you a true picture of what’s going on with regard to price, which is why you really want to look at the home price index, which keeps the quality of homes constant over time.”

The Multiple Listing Service home price index is down 0.8 per cent to $606,000 in Vancouver year-over-year in September, while it is up 3.9 per cent nationally.

“Stricter high-ratio mortgage regulation further exacerbated a moderating trend in consumer demand,” said Cameron Muir, BCREA chief economist. “Reducing the maximum amortization from 30 to 25 years had the equivalent impact to affordability as a 100 basis point increase in mortgage interest rates.”

In Metro Vancouver, the dollar volume of sales was down 35.7 per cent in September, year-over-year, figures released Monday by the B.C. Real Estate Association show.

Robyn Adamache, Canada Mortgage and Housing Corporation’s senior market analyst for Vancouver, said sales of single family homes are down 29 per cent for the first nine months of 2012 compared to the same period last year, while townhouse sales are down 20 per cent and apartment sales are down 16 per cent.

Although the overall average home price is down seven per cent, single-family home prices are down five per cent on average, while townhouse prices are down one per cent and apartment prices are down three per cent. Because more apartments and fewer houses are selling this year, the decline in average price is larger than the drop in price for any particular property.

Adamache also said there is a shift in sales volume away from very expensive single-family homes in areas such as the west side of Vancouver, West Vancouver and Richmond and toward more affordable homes in places such as Maple Ridge.

Adamache said sales numbers are expected to remain flat until the middle of 2013, when they are expected to increase, not to the lofty levels seen in 2011, but approaching those levels. She said prices are expected to decline overall this year, with a smaller decline next year.

Muir also said demand is expected to be on the rise.

“An expanding population, strong full-time employment growth and persistent low mortgage interest rates are expected to bolster housing demand in the months ahead,” Muir said.

Sales volume numbers are a lot more volatile than prices, Klump said.

“If you’re not forced to sell at a price you’re not willing to accept, you don’t sell,” Klump said. “If you’re getting offers below what you’re prepared to sell for, you take it off the market.”

Nationally, home sales in September fell 15.1 per cent from a year ago, CREA reported, adding that sales in September were up 2.5 per cent from August — the first month-to-month gain since March.

“While some first-time homebuyers may no longer qualify for mortgage financing under the new rules, it is likely that many others are stepping back and reassessing how much house they can realistically afford, which is one of the things new mortgage rules were designed to do,” Klump said.

While Vancouver’s home price index was down slightly, Calgary had a 6.5-per-cent increase in the index, the Toronto area was up 5.7 per cent, the Montreal area was up 2.2 per cent and the Fraser Valley was up 2.1 per cent.

Regina had the biggest increase among markets measured by the HPI, with a gain of 14.2 per cent from September 2011.

TD Bank economist Francis Fong said the month-over-month gain only partly offset August’s drop, with sales off their peaks in most markets across the country.

“The Canadian housing market has clearly lost some of its lustre,” Fong wrote in a note to clients.

“That being said, with interest rates remaining sufficiently accommodative, we do not anticipate any precipitous decline in housing activity in the near term. Rather, we expect a gradual unwinding of the imbalance in both sales and prices over the next few years.”

The sales report came as the Conference Board of Canada said that most Canadian cities are facing lower housing starts in the coming years as markets slow, with only 10 of the 28 cities showing positive long-term expectations.

Construction is going strong in Metro Vancouver, with housing starts on pace in September to reach 20,000 units by year’s end, mostly driven by multi-family developments, Canada Mortgage and Housing Corporation reported last week.

CREA said Monday there was still a balance between the number of homes for sale and the number of buyers in September, but conditions have eased.

The national sales-to-new listings ratio, a measure of market balance, stood at 49 per cent in September 2012, remaining near the midpoint of a balanced market.

Source: Tracy Sherlock, Vancouver Sun

The Canadian Real Estate Association says there was a slight improvement in the resale housing market last month, although it’s still slower than a year ago — mainly due to a slowdown in Vancouver.

The association said Monday sales in September were up 2.5% from August — the first month-to-month gain since March.

Compared with September 2011, however, the number of deals across the country last month was down 15.1%.

The association said there was still a balance between the number of homes for sale and the number of buyers in September but conditions have eased.

CREA attributed the slowdown to new rules brought in by Ottawa that make it harder for first-time buyers to qualify for mortgages.

However, other observers have noted that reduced affordability after years of rapid price increases — particularly in some markets such as Vancouver and Toronto — and an uncertain world economy have also dissuaded buyers.

“National activity is likely to remain down from year-ago levels over the fourth quarter of 2012,” said Gregory Klump, CREA’s chief economist.

“While some first time home buyers may no longer qualify for mortgage financing under the new rules, it is likely that many others are stepping back and reassessing how much house they can realistically afford, which is one of the things new mortgage rules were designed to do.”

The national average home price was up 1.1% in September from a year earlier.

But the MLS HPI home price index, which also takes into account other factors, showed its smallest gain since May 2011, rising by 3.9% in September.

The association said Vancouver, the country’s most expensive residential real-estate market, skewed the national results.

Excluding that city, the national average price was up 3.4% from a year ago.

The MLS HPI in Vancouver posted a 0.8% decline year-over-year in September. In contrast, Calgary had a 6.5% increase in the index, the Toronto area was up 5.7%, the Montreal area was up 2.2% and the Fraser Valley in southern British Columbia was up 2.1%.

Regina had the biggest increase among markets measured by the HPI, with a gain of 14.2% from September 2011.

The national sales-to-new listings ratio, a measure of market balance, stood at 49% in September 2012, remaining near the midpoint of a balanced market.

Based on a sales-to-new listings ratio of between 40 to 60%, a little less than two thirds of all local markets were in balanced market territory in September.

Source: Canadian Press

Open Houses are more than just an opportunity to check out your neighbour’s interior decor, or to glean ideas to improve your own home. This recent article by Jill Krasny at Business Insider has some tips to help you find out so much more:

Open houses are a smart way to gauge whether a listing’s catching heat and if it’s worth seeing again in a private showing.

“If you’re just getting started with the process, an open house tour is like a get-out-of-jail-free card,” says Zillow.com real estate expert Brendon DeSimone. “It’s free, you can go because there aren’t restrictions and it’s a great way to learn the market.”

To his mind, the primary thing home shoppers overlook tends to be the most obvious: the crowd. Observing other shoppers is key, he says, as that’s the best way to gauge the market’s response to the home.

“If you like the house, watch the people. Is it packed? Are they hovering around the agent?,” he says. If so and if they’re asking pointed questions as well, you can bet that there’s serious interest and the listing is going to go fast.

Another strategy is to observe the agent, he adds.

“If you go to a house and you like it but no one’s there, maybe there are issues there,” says DeSimone. “You should watch the listing agent’s reactions because he wants to see the response to the house and how crowded it is.”

But don’t miss the opportunity to make small talk with the seller.

“You should ask why he’s selling, nothing rude, just what’s the story,” DeSimone says. “What’s their motivation to sell?” That should give you a feel for the pricing and whether the listing is gathering dust.

Questions like, how many days has the home been on the market?, or Have you lived here for a long time? should get the conversation going. Perhaps there’s a looming job transfer, or the seller is just moving down the street.

“If they’re not motivated you won’t want to waste your time,” says DeSimone. But at least you’ll know where they stand.

Canada’s housing market appears to be cooling across the board in the face of tighter mortgage rules that affect many first-time buyers of modest means, a new analysis from the Conference Board shows.

The think-tank’s snapshot of resales for August shows a widespread decline in sales of existing homes, with 21 of 28 metropolitan markets registering a drop from July, and 16 of the markets showing a falloff of five per cent or more.

As well, listings fell in 17 of the 28 markets, an indication that owners were reluctant to place their homes for sale due to soft conditions.

Senior economist Robin Wiebe of the Conference Board said there was evidence of cooling in some markets — particularly Vancouver and Victoria — before the new rules went into effect July 9. But the new data shows the slowdown has spread to most markets and from coast to coast.

“When you see sales down in three-quarters of the market, that means it’s pretty widespread,” he said. “It’s knocked down previously high-flying markets like Regina and Saskatoon down a peg. Vancouver had been showing signs of cooling, now it’s spread out into the Fraser Valley.”

At the time Finance Minister Jim Flaherty announced a maximum amortization period for mortgages would be reduced to 25 years from 30 years, the government estimated it would increase monthly payments by $184 on a $350,000 mortgage.

It had been the fourth time Flaherty tightened mortgage requirements in four years, but the July measure was regarded as the one likely to be the most effective.

While sales and prices were only temporarily sidetracked by the previous announcements, only to recover a few months later, this might “be the one that broke the camel’s back,” said Wiebe.

Last week, the Canadian Real Estate Association reported that sales of existing homes fell 5.8% in August from July, and were down 8.9 per cent from August 2011.

Still, the latest data shows that while sales and listings are down, prices appear to be holding steady.

The report found prices fell in only nine of the 28 markets in August from the previous month. Compared to last August, prices were up in 25 markets.

Economists have generally been forecasting a correction of between 10 and 25% in prices over the next two or three years. Vancouver, which had for years been Canada’s hottest market, has seen a tumble of about 30 per cent in resale homes.

But Wiebe is not so sure the correction will be as severe as many predict, or that Vancouver’s market is as cold as the numbers suggest.

He notes that Vancouver’s average home prices are skewed by the number of high-end properties sold — many to investors from China. Both the meteoric rise and current decline are “overstated,” he said.

Homes in the Toronto area, Canada’s largest market, are also likely to retain their value, he said, because the economy in the city remains healthy and the greater metropolitan area continues to experience strong population growth.

Source: Julian Beltrame, Canadian Press

The Canadian Real Estate Association cut its 2012 and 2013 outlook for home sales and lowered its national average price forecast on Monday as it reported the biggest month-to-month drop in activity in two years.

The association said that tighter regulations on mortgage lending that came into effect in July helped push August homes sales to their largest month-over-month decline since June 2010.

Sales of previously owned Canadian houses and condos have now gone down in five of the past six months.

“While we always caution that housing market trends at the national level can and do run counter to trends in many local markets, the decline in activity in August was definitely the result of much of the country moving in the same direction,” CREA president Wayne Moen said in a statement.

Sales in August slipped 5.8% compared with July and were down 8.9% compared with August 2011.

In its outlook for the year, CREA said Monday that home sales are now forecast to rise by 1.9% to 466,900 units in 2012. That compared with a forecast in June that suggested 475,800 homes would be sold in 2012, up 3.8% from 2011. CREA expects volume will slip by 1.9% to 457,800 units in 2013.

CREA also forecast the national average home price would rise by just 0.6% to $365,000 in 2012 and edge lower by one tenth of one per cent to $364,500 in 2013. The outlook was down from a June forecast that prices would rise by 2.2% to $370,700 in 2012.

TD has suggested that the tighter mortgage rules will shave five percentage points off sales activity and cut prices by three per cent on average during the second half of this year and early 2013.

In the next three years, the bank has said it expects the combination of the tighter rules and anticipated modest increases in interest rates will result in a 10 per cent price correction on homes.

CREA said sales were lower in about two-thirds of all local markets across Canada representing 80% of national activity, with lower monthly sales in almost all large urban centres, Toronto, Montreal, Vancouver, the Fraser Valley, Calgary, Edmonton and Ottawa.

House price sales and price forecast by CREA

“The broadly based decline in August sales activity suggests that some buyers may no longer qualify for a mortgage now that amortization periods for high ratio mortgages have been shortened,”said Gregory Klump, CREA’s chief economist.

“As the lynchpin of the housing market, lower first-time buying activity will have downstream effects over the rest of the market. While we expect it will likely take more time for move-up buyers to sell their current home, a few more months of data are needed to gauge the broader impact of recent regulatory changes on Canada’s housing market.”

Ottawa has tightened mortgage rules four times since 2008.

Among the most recent changes, the federal government reduced the maximum amortization terms for government insured mortgages to 25 years from 30.

Source: Craig Wong, Canadian Press

The pace of housing starts picked up August, boosted by big multiple-unit projects in Toronto, even as the Canadian real estate market showed signs of cooling.

Canada Mortgage and Housing Corp. said Tuesday there were 19,860 actual housing units started in August to set a seasonally adjusted annual pace of 224,900 units for the month, up from 208,000 in July.

The consensus estimate by economists had been for a seasonally adjusted annual pace of 201,000.

“This increase is primarily a reflection of the high level of pre-sales in some of these large multi-unit projects in late 2010 and early 2011, which is in line with job gains at that time,” said Mathieu Laberge, deputy chief economist at CMHC’s Market Analysis Centre.

“The higher level of starts recorded in Atlantic Canada and British Columbia in August reflect low levels of activity in July rather than an increasing trend that was registered in August. Overall, moderation in housing starts activity is still expected for the remainder of 2012 and 2013.”

TD senior economist Jacques Marcil said the data shows Canadian housing construction remains in high gear and suggested the pace won’t continue.

“The rest of the economy is growing much slower and as a consequence is not likely to be able to support this level of housing supply for much longer,” Marcil warned.

“While recent changes to mortgage insurance rules will likely limit the growth in demand for new homes, low interest rates remain an incentive for buyers to borrow and keep the housing market overvalued.”

Last week, Toronto Real Estate Board reported that sales of existing homes in the Toronto fell 12.5 per cent from last year, although the average price of $479,095 was 6.5 per cent higher.

Meanwhile, the Vancouver board said sales dropped 30.7 per cent in August, while the average price was only 0.5 per cent lower at $609,500.

The drop in sales followed a move by Finance Minister Jim Flaherty to reduce the amortization rate on new government insured mortgages to 25 years from 30.

It was the fourth time in as many years the minister has tightened mortgage rules.

CMHC said Tuesday that the seasonally adjusted annual rate of urban starts increased by 10.2 per cent to 205,900 units in August.

Urban single starts remained relatively unchanged in August at 64,300 units, while multiple urban starts increased by 15.5 per cent to 141,600 units.

August’s seasonally adjusted annual rate of urban starts increased by 47.5 per cent in Atlantic Canada, by 20.4 per cent in Ontario, by 18.2 per cent in British Columbia and by 1.3 per cent in the Prairies, while they dropped by 9.8 per cent in Quebec.

The Toronto and Vancouver housing markets have cooled rapidly in the wake of Ottawa’s latest bid to stop a bubble, with many first-time buyers knocked out of the running.

Finance Minister Jim Flaherty put the July 9th changes into effect to curb growing mortgage debt levels and take some steam out of house prices. Among other things, the new rules cut the maximum length of insured mortgages to 25 years from 30.

The changes have sparked a debate in Canada. Some industry players and economists worry that the impact will be so widespread and long-lasting that they want Mr. Flaherty to consider rolling some of them back. But with prices that some still deem overvalued and new fears over consumer debt, others say the changes aren’t enough and must be followed by a hike in rates.

Among the latter is Toronto-Dominion Bank chief economist Craig Alexander, who estimates that national home prices are 10 to 15 per cent too high.

He released a report last Thursday predicting the July changes will shave three percentage points off prices and five points off sales by next year.

“Our models suggest that had the government not tightened lending mortgage rules between 2008 and 2011, the Canadian household debt-to-income ratio would have reached 160 per cent this year – the level that households in the U.S. and U.K reached before sending their economies and housing markets into a tailspin,” Mr. Alexander wrote.

While debt burdens are lower than they would have been, they’re still at troubling levels. Moody’s Analytics said in a separate report that economic headwinds will increasingly cause consumers to struggle with their debt loads over the next few years.

And although the mortgage insurance rule changes have curbed house sales and debt levels somewhat, the impact on prices has been relatively fleeting, Mr. Alexander said. Without rate increases, consumers still have a strong incentive to take out large mortgages, fuelling overvalued prices, he argues.

The impact of the changes is predominantly being felt by first-time home buyers because they are typically the ones who require mortgage insurance. Insurance is mandatory in Canada for borrowers who have a down payment of less than 20 per cent, which has traditionally been about 35 to 40 per cent of the market.

Brian Hurley, the CEO of Genworth Canada, the second-largest mortgage insurer, said business slowed in August as a result of the rule changes. He would like Ottawa to revisit the rules later this year, and consider reversing some of the changes.

“These are pretty dramatic changes, and I think they’re getting close to the tipping point,” he said in a recent interview. “We see really qualified first-time home buyers with very high credit scores now not meeting the bar because they can’t afford a 25-year amortization. These people should be getting a home.”

Eric Lascelles, chief economist at RBC Global Asset Management, approves of most of the rule changes, but said there is a risk that they are being overdone to compensate for ultra-low mortgage rates.

“I wonder if the drop from 30 to 25 years amortization might be regretted in a decade when interest rates have normalized and 25-year-olds are being told they cannot make mortgage payments past the age of 50, even though they expect to work until 65,” he said in an e-mail.

Traditionally, the banks have applied mortgage insurance rule changes to all mortgages – even those with large down payments that don’t require insurance. But that hasn’t been the case this time, Mr. Alexander said.

“The banks are basically not applying the 25-year limit to the non-high-ratio mortgages,” he said in an interview. “That’s one of the reasons why the mortgage insurance rule changes had a more muted impact on the market, because really the segment that’s being significantly hit is the first-time buyers.”

Jim Murphy, the CEO of the Canadian Association of Accredited Mortgage Professionals, said that while Mr. Alexander’s prediction that the changes will dent sales by five percentage points could be correct, the impact on the insured portion of the market appears to be more like 15 per cent. “It’s having a bigger impact on first-time buyers,” he said.

On Thursday, the Toronto Real Estate Board said sales of existing homes in the country’s most populous city fell almost 12.5 per cent in August from a year ago. But the average price rose by almost 6.5 per cent, to $479,095.

One day earlier, Vancouver’s real estate board said August sales were the second-lowest level for that month since 1998, while the average price of a home in the Greater Vancouver Area was down 0.5 per cent from a year ago.

Source: Tara Perkins, Globe and Mail