HOUSING DIVIDED
RULE CHANGES HIT CALGARY, WHILE TORONTO PRICES KEEP SOARING.
TORONTO • Tougher lending rules are doing very little to slow down Canada’s biggest housing market, while realtors in Western Canada are lamenting how government changes have waylaid any recovery in their areas, new data shows.
The Toronto Real Estate Board reported Friday that prices in the Greater Toronto Region were up almost 23 per cent in November from a year ago. The 8,547 homes sold through the Multiple Listing Service last month were up 16.5 per cent increase from a year ago.
Meanwhile, in Greater Vancouver, the impact of a decision by the province to impose a 15 per cent additional property transfer tax on foreign buyers may still be having an impact. The Real Estate Board of Greater Vancouver said Friday its index price of $908,300 was down 1.2 per cent in November from just a month before.
But it is in the oilpatch where the sting of federal regulations, which includes tougher rules on how large a loan a consumer can qualify for, is really being felt.
Monthly s al es in Alberta’s largest city, hit hard by slumping oil prices, were 1,227 in November, almost three per cent lower than a year ago and 17 per cent below long- term averages. Home prices across the city averaged $ 436,200 in November, a 0.6 per cent drop over the previous month and nearly 4.1 per cent below last year’s levels.
“November was the first full month with CMHC’s new lending rules in effect,” said Ann-Marie Lurie, chief economist with the Calgary Real Estate Board. “As suspected, the gains in last month’s sales were temporary. Stringent conditions for borrowers are converging with the current economic climate and weighing on demand.”
Prices for detached homes in Calgary dropped to $ 498,300 in November, the first time since early 2014 that the monthly benchmark price was below $ 500,000. “These monthly figures aren’t a big surprise given the dynamics of our market right now,” said Cliff Stevenson, president of the Calgary board.”
Among the key changes brought in by the federal government was a rule that consumers must qualify for a loan based on the posted rate for a five-year fixed rate mortgage, now 4.64 per cent. The result should mean less available cash for consumers, who can actually borrow at almost two per cent on their contract.
But in Toronto the change doesn’t seem to be having an impact on purchasers.
In the city of Toronto’s detached property class, a scarce commodity these days in terms of listings, prices soared 32.2 per cent in November from a year ago to $ 1,345,962. Across the Toronto region, the composite benchmark price was up 20.3 per cent from a year ago and the average selling price rose 22.7 per cent to $776,684.
Toronto realtors, instead of directing their anger at federal officials and loan restrictions, directed their wrath towards provincial officials who they maintain have created the price pressures with land use policies.