New home sales in Toronto plunged 64% in the wake of government’s changes to insured mortgages (30yr to 25yr) and home equity line of credit restrictions (80% max to 65% max) which took effect in July.
Lowest August on Record
Reader Corey emailed the above comments and a news link from the Canada BILD Association: New Home Sales Slip in August.
According to RealNet Canada Inc., BILD’s official source of new home market intelligence, the 1,242 homes sold in August 2012 add up to the lowest monthly sales since 2009 and the lowest August on record. Year-to-date sales have remained on par with 2010 but below its record-breaking 2011 predecessor.
“The federal government has been working on reducing household debt levels and recently adjusted mortgage lending rules. August was the first full month with the new rules in place and it appears these regulations have affected consumer confidence, resulting in significantly reduced sales of new homes,” explained BILD President and CEO Bryan Tuckey. “BILD will be carefully monitoring new home sales during the next three months to see if this decline becomes a trend.”
| August ’12 | Low Rise | High Rise | Total | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Region | 2010 | 2011 | 2012 | 2010 | 2011 | 2012 | 2010 | 2011 | 2012 |
| Durham | 182 | 206 | 119 | 7 | 7 | 12 | 189 | 213 | 131 |
| Halton | 241 | 610 | 75 | 24 | 283 | 15 | 265 | 893 | 90 |
| Peel | 202 | 281 | 267 | 89 | 63 | 66 | 291 | 344 | 333 |
| Toronto | 18 | 47 | 22 | 751 | 1,027 | 469 | 769 | 1,074 | 491 |
| York | 356 | 385 | 114 | 108 | 587 | 83 | 464 | 972 | 197 |
| GTA | 999 | 1,529 | 597 | 979 | 1,967 | 645 | 1,978 | 3,496 | 1,242 |
| GTA % Chg | -60.95% | -67.21% | -64.47 | ||||||
| Jan-Aug | 11,212 | 12,357 | 10,710 | 12,347 | 18,055 | 13,591 | 23,559 | 30,412 | 24,301 |
“Slip” hardly seems the operative word. Crash is more like it.
Also consider Bernanke Declares War on Canadian Economy (Rest of the World Too)
Addendum:
I said Canada previously but those sales are specifically the Toronto region.
Mike “Mish” Shedlock
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