Drop in Sales due to New Mortgage Rules

(September 26, 2012 )

In July, the maximum amortization for mortgages was reduced from 30 years to 25 years.  The maximum amount for high-ratio mortgages was reduced from 85% to 80% of the property value.

We are starting to see the effects now.  From July to August, Vancouver number of home sales dropped 8.5%, and new listings dropped 1.5%.

Prices however actually gained 3%.  Robin Wiebe with Conference Board of Canada says while he expects "a few more months of price softness" in the Vancouver real estate market, he is not expecting major declines because "ultimately, Vancouver's economy is decent.  Employment is rising, interest rates are low and the population is growing relatively quickly."