Drop in Sales Due to New Mortgage Rules
Sep 27, 2012
(News Release) TORONTO – The Conference Board of Canada reports a widespread drop in sales following the latest tightening of mortgage lending regulations. In August, sales of existing homes fell from July volumes in 21 of the 28 markets covered in the Metro Resale Snapshot-September 2012. The dips were 5 per cent or more in 16 of these. August sales trailed their year-earlier level in 20 areas.
New listings eased between July and August in 17 cities and were also behind their previous year's volume in 17 markets. Falling listings are another sign of weakness, because homeowners are less likely to list when the market is soft.
A declining sales-to-listings ratio in 21 markets is another indicator of cooling, but balanced conditions were still observed in 23 areas in August. Victoria, Vancouver, Québec City, and Gatineau flashed buyers' signals last month. A big drop in listings pushed Windsor into sellers' conditions, but this is unlikely to last, as sellers are expected to retreat in coming months.
Despite the softer market, average prices in August were down from the previous month in only 9 of our 28 markets and hovered above August 2011 levels in 25 areas.
The full Metro Resale Snapshot is available at this link.