Toronto Loft Conversions

Toronto Loft Conversions

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Modern Toronto Lofts

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Unique Toronto Homes

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Condos in Toronto

Condos in Toronto

I started off selling mainly condos, helping first time buyers get a foothold in the Toronto real estate market. Now working with investors and helping empty nesters find that perfect luxury suite.

Toronto Real Estate

Toronto Real Estate

For all of your Toronto real estate needs, contact Laurin. I am dedicated to helping you find that perfect and unique new home to call your own.


Surprise — stricter lending rules slowing home purchases

Alexandra Posadzki – The Canadian Press

Ottawa’s move to tighten Canada’s mortgage rules a year ago helped cool down the country’s real estate market by forcing some first-time home buyers to delay their purchases, economists say.

Comment: Everyone knows this, we knew it in October. The number of first time buyers shut out of the market pretty much equaled the drop in sales.

A Bank of Montreal study suggests roughly one in five potential first-time homebuyers have postponed their purchase since Finance Minister Jim Flaherty introduced his new lending rules a year ago.

Comment: CAAMP showed the same results around 8 months ago. Glad other people are realizing it now, though!

The rule changes included a reduction to the maximum amortization period to 25 years from 30 for insured mortgages.

It was the fourth time Flaherty tightened mortgage lending rules in as many years, incrementally dropping the longest amortization period from 40 years.

“It did take a bit of steam out of the market because it essentially forced quite a number of potential buyers, especially first-time buyers, to wait a while longer,” BMO’s chief economist Doug Porter said in an interview.

Comment: But they are sure coming back now!

About 19% of those polled by BMO said they decided to wait longer to buy their first home, while 66% said the changes have not affected their timeline.

Meanwhile, 14% said they planned to buy sooner.

A recent report by the Bank of Nova Scotia estimated the mortgage rule changes may have pushed 10% of potential buyers out of the market.

Both Porter and Scotiabank economist Adrienne Warren said the changes helped the country’s overheated real estate market achieve its desired soft landing.

“I think it was almost the perfect soft landing for policy makers,” said Porter.

“It cooled, but it didn’t undergo a so-called hard landing. Sales did drop pretty heavily the first couple months, but then they stabilized and they’ve started to creep back up again.”

Housing sales in the Greater Toronto Area were down by less than 1% in June from a year ago while the average selling price climbed 4.7%, according to recent figures from the Toronto Real Estate Board.

Going forward, rising mortgage rates could block more prospective buyers out of the market, Warren said.

Comment: Maybe, maybe not. No way to know until it happens. Supposing the worst case hasn’t worked well in the past, let’s not do it now. Remember, 2007 set a record for sales, with mortgage rates more than 2% higher than today.

Mortgage rates have been at all-time lows since the economic downturn, but fixed rates have slowly started to rise in the past two months.

“The recent upward drift in mortgage rates could dampen housing demand in the second half of the year, especially in high-priced markets such as Toronto and Vancouver where affordability is more strained,” Warren said in a statement.

Contact Laurin Jeffrey for more information – 416-388-1960

Laurin Jeffrey is a Toronto Realtor with Century 21 Regal Realty. He did not
write these articles, he just reproduces them here for people who are
interested in Toronto real estate. He does not work for any builders.