November was the busiest for home sales on record, despite a slowdown in activity in the Greater Toronto Area.The Canadian Real Estate Association said today that home sales rose by almost four per cent in November from the previous month.
The months at the end of the year aren’t typically a busy time for home sales, but the real estate group says sales are picking up, in part because buyers are rushing to get in before new stress test rules take effect in January.
All borrowers with uninsured mortgages must be stress-tested to make sure they could still pay down their loans if rates were higher from January 2018. Anyone who fails the stress test will be prohibited from getting the loan they’ve applied for, and will have to either get a smaller mortgage for a cheaper home, or not buy in the first place.
CREA president Andrew Peck said, “Some home buyers with more than a 20 per cent down payment may be fast-tracking their purchase decision in order to beat the tougher mortgage qualifications test coming into effect next year. It will be interesting to see whether December sales show further signs of home purchases being fast-tracked.”
The increase in home sales came without any help from Toronto’s big market, where “activity remains down significantly from year-ago levels” after the province moved earlier this year to implement new rules to crack down on speculators and foreign buyers.
Across the country, the average price of a home sold on CREA’s Multiple Listings Service during the month was $504,000. If the two big and expensive markets of Toronto and Vancouver are stripped out, the average house price drops by $120,000 to just above $381,000.
