Last month was a very tight month for Canadian homebuyers as they saw new stiff regulations being made to help cool down the housing prices. New mortgage laws coupled with bank’s increasing on mortgage rates all added to the stress of homebuyers especially first-time buyers.
But with all the laws being made, there have been no reports of their effects on the housing market most especially the Toronto market which is the hottest presently in Canada.
Data from the Canadian Real Estate Association shows that there was an 18% increase in the housing sector in 2015 with a 2% increase in the month of October for Canada’s leading housing market. However Vancouver which also peaked during the year experienced a decline in October, but the house prices over the year increased by 28%.
However there was a huge gap between the leading markets and those outside of lower British Columbia and the Golden Horseshoe where the home prices were stagnant.
This is why banks, buyers, agents and builders are expressing their concern about the laws the government is making and suggests that the government should rather focus on making more houses available instead of prioritizing the demand for houses.
In his part, Morneau explained that he made the laws to help bring financial stability and the issues about supply are not something he is not regarding. He went on to state that he had cajoled the British Columbia and Ontario governments to make more properties available but his request was coldly received.
Toronto has the worst level of supply as the supply level in 2015 dropped by 22% which is the lowest that was ever experienced since 1995.
Vancouver market is however doing better in terms of new home construction.
Kevin Lee chief executive of the Ottawa-based advocacy group states that the new laws made are not helping matters and that builders only build new homes if they are permitted.