In an announcement from TD Economist Diana Petramala, the implications for the Ontario market are less significant due to booming demand and tight inventories.
Here’s a synopsis of her comments:
- With demand weakening, the national sales-to-listings ratio came down more than 3 points to 59.6 in the month, tipping the national market back into balanced territory.
- Prices are still growing fairly strongly, with the average existing home price up 7.3% from a year ago and the MLS quality adjusted index was up 14.4% year over year.
- Changes to mortgage regulation rules were more immediate in smaller markets more dependent on first-time home buyers to drive demand.
- The shift in foreign buying from Vancouver to Toronto limited the immediate impact of the new regulation on the GTA and surrounding areas, although the full impact may not be felt until the 1st quarter of 2017 due to lags on pre-approved mortgages.
- Vancouver average home price drops between August and October had been overstated. The MLS quality adjusted home price index remains a better gauge of home price pressures in the market – down a mere 2.7% from its peak earlier this year.
- As new mortgage regulation and higher interest rates cool 2017 activity, price growth is expected to decelerate to a sub-1.0% pace nationally, but prices in Ontario’s hot markets should continue to grow at a high-single digit pace.