Around this time last year, Ottawa’s plan to give the white-hot Canadian housing market a slight chill came into effect. The new measures, which saw the maximum amortization for insured mortgages cut from 30 to 25 years, were meant to prevent a housing bubble from forming.
According to a new Scotiabank Economics report, Finance Minister Jim Flaherty’s new rules cut down the pool of would-be homebuyers by an estimated 10 per cent.
However, the “intended cooling” was slight and low interest rates, job gains and population growth continue to fuel housing demand. Altogether, major cities largely reported a modest firming in sales and moderate single-digit year-over-year price increase. The Canadian housing market saw a 0.7 increase in sales from June 2012 to June 2013, and home values rose 3.7 per cent from a cross-country average of $450,099 to $466,783.
Toronto was one of the big cities that was mostly in step with the national numbers: year-over-year, sales dipped by just 0.7 per cent and prices increased overall by an average of 4.7 per cent.
The region that saw the steepest drop in sales: Fraser Valley. It saw transactions drop by about 9.3 per cent, though prices still managed a 1 per cent bump.
Other outliers include Calgary and Vancouver. Calgary saw a 5.8 per cent in year-over-year sales and the average price rose by 5.2 per cent to $457,506. Vancouver saw the most dramatic rise with an 11.9 per cent bump in sales from June 2012 to 2013, though values did drop by 3 per cent to a new average of $601,900.