Time for your weekly update on the most important real estate stories.
Canadian real estate prices drop for a third month in row. The benchmark price of a home fell to $602,400 in August, down 0.77% from the month before. The last time Canadians saw prices drop 3 months in a row was in 2008, so it’s been awhile since this has happened.
A new banking proposal from the financial regulator OSFI would see mortgage leverage drop by over 25%. We run the numbers and show most of the country would experience minimal impact. Cities like Toronto and Vancouver however, have steep home prices compared to incomes. The reduced leverage will make it much harder for these buyers.
OSFI’s B-20 proposal will impose strict rules on new borrowers, but people renewing won’t be impacted as much. Borrowers renewing won’t have to prove they can handle a rate hike of 2%, like all new borrows would. However, that’s only if they’re renewing at their current mortgage provider. If they find a better rate at another lender, be prepared to undergo a full stress test again.
Toronto real estates sales over a million dollars dropped compared to last year. There were 965 real estate sales over a million dollars in August, down 37.66% from the same month last year. Condo sales over a million dollars were higher, but at only 70 units in August – it’s not exactly enough to give the market a huge boost.
Toronto real estate inventory is experiencing explosive growth, but how high is this number? August saw 2.3 months of inventory, a whopping 144% increase from the low of 0.8 months hit last year. While that’s a huge jump, the long-term average is 3.1 months according to the Canadian Real Estate Association. Inventory increased dramatically, but is still far below the long-term trendline.
Montreal median incomes are nowhere near the rest of the country. The median household income is $61,790, a rise of 16.53% from the previous Census numbers. While that’s a decent rise, it still trails far behind the national median income of $70,336.
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