As the months go on, it’s obvious that the Canadian market’s sales are slowing. For example, Ontario saw a 22% drop in home sales during January. This had the biggest effect on new construction which reached their lowest point since 2000. What’s the upside to slowing home sales?
In Q4 of 2017 housing started becoming more affordable for the first time since Q2 of 2015. Although it only fell by 0.2 points, it’s a positive sign for the market in general. With some predicting that the highly competitive Toronto market will see the biggest jump affordability during 2018.
- Home sales in Toronto dropped by 22% during January 2018.
- Housing affordability in Canada increased by 0.2 point during Q4 of 2017.
- The Bank of Canada hiked rates by 25 points recently, but falling sales means that the next hike won’t be coming for quite a while.
January was a cool month for the Canadian housing market, as national home sales dropped 14.5 per cent month-over-month. “We expect some near-term volatility to persist in the market, as the fallout from the new mortgage rules and rising interest rates is absorbed by buyers and sellers,” wrote TD senior economist Michael Dolega, in a recent note.
According to Dolega, the numbers confirm many economists’ predictions that the new mortgage rules would cause a pull-forward of sales activity in December, followed by a steep sales drop in January.
But what else does the drop in sales mean for Canadian buyers and sellers this month? Read on for BuzzBuzzNews’ roundup of this week’s need-to-read commentary.
The new construction market takes a serious hit
Ontario saw a 22 per cent sales drop in January. The GTA new construction market was hit particularly hard, as sales of single-family homes reached their lowest level since 2000.
“The January data continues a trend we have seen in the GTA,” wrote BILD president and CEO David Wilkes, in a statement. “Our industry wants to meet consumer demand in terms of the mix and type of homes available, but we are constrained by government policy. Affordability and the lack of supply of single-family housing remain a challenge.”
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