Housing sales will fall next year, with prices soon to follow.
Across the country, sales of houses, condos, and apartments are projected to decline by 5.3%, according to the Canadian Real Estate Association (CREA).
That’s about 27,000 fewer transactions — or 8,500 fewer than what the CREA predicted in September.
The association forecasts that the national average home price will decrease by 1.4%. The average price of a detached house in Toronto may have reached the record-setting $1-million mark this year — but that trend that won't continue in 2018, according to the association.
But many prospective buyers aren’t waiting for homes to become more affordable: November was the fourth month in a row where overall sales increased, according to according to the CREA’s latest monthly sales data.
National home sales rose by 3.9%. Most of those sales occurred in the Greater Toronto Area (GTA), increasing 16% month-over-month.
This kind of activity is unusual — sales usually taper off towards the end of the year before picking up again in the spring.
It’s a sign the new mortgage rules going to effect on Jan. 1 — which will force lenders to evaluate whether mortgage applicants can afford to a mortgage at a rate two percentage points higher than what they currently qualify for — are already having an impact.
The new rules are expected to reduce purchasing power by up to 15%.
Some of the hottest housing markets last month were Vancouver, Fraser Valley, Calgary, Edmonton, Ottawa, and Montreal.
The GTA was noticeably absent from the list. While it remains one of the most popular places in the country for buyers, sales have decreased substantially compared to last year. Price growth is also showing signs of slowing down.
Meanwhile, home prices in British Columbia’s Lower Mainland area have reached a new high after dipping in the middle of the year, rising 14% on a year-over-year basis.