There are number of factors that include increasing interest rates and new mortgage rules that made themselves felt in Canadian housing market in February as home prices declined in 7 cities out of 11 major cities at national level that include Toronto.
Teranet-National Bank home price index fell down by nealy 0.1% in last month. Marc Pinsonneault, Senior Economist at National Bank noted that this index represented 4th time in just half a year as this has decreased, that fall down a total of around 1.9% more than past 6 months.
As per Pinsonneault February index still was up by 7.5% as comparatively to a year ago, momentum is weakening as year’s figure of January had been up by 8.7%.
David Madani, senior economist at Capital Economist said that renewed decline in February in home prices suggests that Canadian housing market is in price correction. You should also know that What You Need to Know Before Buying or Selling a Home in Canada.
“Recent increases in interest rates and tougher mortgage rules have impacted negatively on home sales and it will continue to depress the home prices.”
Observers warned that city may suffer from a very prolonged correction in Canadian housing market.
Robert Kavcic, senior economist at Bank of Montreal said that a long period of stagnation for single detached home prices may be setting.
He also said that they are pushing latter stages of cycle, so policy induced corrections that will likely to run its course.”
Even though price index of Vancouver also saw an increase in February, Pinsonneault cautioned that trend is just unlikely to last. Here are some views that Canada’s Leading Experts Reveal Their Secrets for Building and Protecting Real Estate Wealth.
Latest housing data from city’s real estate board supported all of this projection: Single-family home sales in Vancouver fell down by 39.4% over the year in February, whereas condos experienced decline of 7.1% in same time frame.
Pinsonneault also wrote that pressure of home price may fade out in this area over next few months, even if moment of resale of Canadian housing market remains too tight.