{"id":8750,"date":"2016-12-15T12:20:04","date_gmt":"2016-12-15T17:20:04","guid":{"rendered":"https:\/\/www.zoocasa.com\/blog\/?p=8750"},"modified":"2016-12-15T12:20:04","modified_gmt":"2016-12-15T17:20:04","slug":"canadian-home-sales-see-4-year-decline-crea","status":"publish","type":"post","link":"https:\/\/www.zoocasa.com\/blog\/canadian-home-sales-see-4-year-decline-crea\/","title":{"rendered":"Canadian Home Sales See 4-Year Decline: CREA"},"content":{"rendered":"

New rules for\u00a0mortgage qualification have now been in place for one month, and the effect is being felt in markets across the country, reports the Canadian Real Estate Association\u2019s (CREA) November numbers.<\/a><\/p>\n

National home sales dipped 5.3% between October and November \u2013 the greatest monthly decline since August 2012 \u2013 with the fewest homes changing hands since last September.<\/p>\n

There are also 0.4% fewer newly listed homes, with available supply shrinking from 4.8 to 4.5 months.<\/p>\n

However, that hasn\u2019t stopped prices from rising \u2013 the MLS Home Price Index rose 14.4% year over year to $581,400, with the national average home price up 7.3%. Two-storey detached houses and townhouses<\/a> saw the greatest gains.<\/p>\n

\u201cNovember was the first full month in which the expanded stress test was in effect for home buyers with less than a 20% down payment,\u201d said CREA President Cliff Iverson. \u201cThe government\u2019s newly tightened mortgage regulations have dampened a wide swath of housing markets, including places not targeted directly by the government\u2019s latest regulatory measures. The extent to which they pushed first time home buyers to the sidelines varies among housing markets.\u201d<\/p>\n

Steeper mortgage qualifications were introduced in October requiring high-ratio mortgage borrowers to qualify at the Bank of Canada\u2019s benchmark rate of 4.64% – in some cases double the contract rates available on the market. Combined with tighter funding criteria for Canada\u2019s banks, higher mortgage rates and lower affordability are expected to take a bite out of the lower end of the market.<\/p>\n

Vancouver and Toronto Part Ways as Powerhouses<\/h2>\n

Canada\u2019s two largest, and most expensive, housing markets fueled housing activity in tandem for years, but it\u2019s clear the 15% foreign buyer tax implemented in Metro Vancouver is greatly impacting the province\u2019s housing market. Stats from the British Columbia Real Estate Association<\/a> (BCREA) show sales have dropped 20.2% in BC year over year, with total sales dollar volume down 25.2% to $4.02 billion.<\/p>\n

Meanwhile, demand is booming in Toronto, and in every surrounding regional market. CREA reports that tight supply and demand in the Golden Horseshoe (including the GTA, Hamilton-Burlington, Oakville-Milton, Guelph, Kitchener-Waterloo, Cambridge, Brantford, Niagara, Barrie and cottage country) is unprecedented. These findings support a recent report from Re\/Max, forecasting Hamilton to be the hottest real estate market of 2017<\/a>.<\/p>\n

These diverging markets have prompted CREA to update its forecast, calling for a 6.2% uptick in sales this year, from the 6% called for in September. However, this will fall by 3.3% in 2017, along with housing prices, which will drop by 2.8% to an average of $475,900.<\/p>\n

Housing to Contribute Less to Economy as Fed Threatens Higher Rates<\/h2>\n

This anticipated slowdown in sales will further dampen economic growth in Canada, according to CREA Chief Economist Gregory Klump. \u201cHousing activity generates a lot of spin-off spending, which makes its weakened prospects an additional source of uncertainty as regards to the outlooks for Canadian and economic job growth,\u201d he says.<\/p>\n

This is made all the more uncertain by strengthening economic conditions in the U.S., which prompted the Federal Reserve (the American equivalent of the Bank of Canada) to hike its benchmark rate for the first time in a year on Wednesday, with potentially three forecast for 2017.<\/p>\n

Related Read: The Trumpfation Effect on Canadian Mortgage Rates<\/a><\/strong><\/p>\n

While the Bank of Canada has taken a decidedly more cautious with rates here, higher American rates could lead to a stronger American dollar, which in turn could soften the loonie, and higher overall costs for Canadians.<\/p>\n","protected":false},"excerpt":{"rendered":"

New rules for\u00a0mortgage qualification have now been in place for one month, and the effect is being felt in markets across the country, reports the Canadian Real Estate Association\u2019s (CREA) November numbers. National home sales dipped 5.3% between October and November \u2013 the greatest monthly decline since August 2012 \u2013 with the fewest homes changing […]<\/p>\n","protected":false},"author":39,"featured_media":8752,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jnews-multi-image_gallery":[],"jnews_single_post":[],"jnews_primary_category":[],"footnotes":""},"categories":[33],"tags":[],"class_list":["post-8750","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate-news"],"yoast_head":"\nCanadian Home Sales See 4-Year Decline: CREA | Zoocasa Life<\/title>\n<meta name=\"description\" content=\"Canadian home sales declined between October and November finds CREA, the national real estate board. 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