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What's going on with the housing market
Jan 11, 2016
Hot Toronto Market
Toronto had a record year for sales in 2015 up by 9.2% over 2014. The average selling price for all homes including condos was $$622,217, up 9.8% over the previous year.
Now Ottawa has announced new rules regarding a loan tied to a government backed mortgage insurance.
David Madani, an economist with Capital Economics, has his doubts whether the new down payment rules will cool the priciest residential markets of Toronto and Vancouver.
Down payment minimums will increase from 5-10% for any amount exceeding $500,000. A $750,000 home will require $25,000 for the first $500,000 and a further $25,000 for the remainder.
Madani states that first time buyers typically purchase homes under this amount so they won’t be affected. The few who may purchase more expensive homes with the help of parents also won’t be deterred and prospective move-up buyers won’t be impacted at all due to the considerable equity in their existing homes.
Real Estate Changes in the Western Market
The fallout is going to be considerably worse out West. With oil prices slumping the economic fallout in Edmonton and Calgary has only just begun, Madani said. Home sales in both regions have fallen significantly and the number of houses up for sale has skyrocketed by 31% and 55% from a year ago.