The Canadian Real Estate Association released December 2016 statistics which showed a rise in home sales of 2.2% month over month. This increase eliminated half of the decline in November which was the largest decline in more than four years. This was probably in response to the tightening of mortgage rules. The real estate and mortgage industries usually go hand in hand because mortgages are an integral part of home purchases.
Activity was up in 60% of all markets led by Calgary and Edmonton which is great considering the slowdown they experienced due to oil reductions and wildfires.
For 2016 the number of homes sold set a new record. New home sales were up 6.3%, mostly in the first half of the year before the new mortgage legislation. Unfortunately, its not expected that 2017 will show as much of a boost to the economy because the new rules have made it more difficult for first time home buyers to buy their first home. Taking some of them out of the market.
The number of new listings fell by 3% in December as compared to November. Most sizably in B.C. lower mainland, Calgary and the GTA. Along with several other Ontario locales, supply and demand in Barrie was tightly balanced. Being situated in Barrie and watching the markets closely I saw that even at Christmas time, many homes sold with multiple offers. Unusual for this time of year.
Prices continue to rise in Canada but this rise has diminished in recent months because of the softening of home prices in BC’s mainland following the introduction of the new 15% land transfer tax for foreigners.
All in all, 2016 ended with some major changes to the mortgage environment, we are expecting that it will take a few months longer for the affects to take hold and lenders and mortgage professionals digest our new realities.
Keep in mind that just because rules have changed, it doesn’t mean that you will be pushed out of the market. Contact a mortgage professonal who has the know how to navigate these new waters.
For more info by Dr. Sherry Cooper
Chief Economist for Dominion Lending Centres http://ow.ly/Xv143086bOX