New mortgage rules have affected home sales

December 14, 2012 — A respectable number of resale home transactions happened throughout the Greater Toronto Area in November, with 5,793 homes changing hands. This represented a 16 percent fall from 6,908 sales in Nov 2011. Meanwhile 3,485 homes modified hands in the 905 Regions, a decrease of more than Thirteen percent from 3,956 sales in November 2011.
A main factor which has influenced the dip in sales experienced in the last few months refers to the changes in mortgage lending rules that came into effect in July. The changes reduced the maximum amortization period from 30 years to 25 years and set a purchase price ceiling for govt. These laws have resulted in some households putting their decision to purchase on hold while they save up additional cash for a down payment and / or experience an increase in their earnings. backed insured mortgages at 1,000,000 dollars. Adding to this situation in the City of Toronto is the extra up front Land Transfer Tax, which takes cash from home purchasers that could otherwise be used to negate the extreme costs of home possession.
While sales decreased year-over-year in November, a modest overall price increase was reported, with the medium price of a GTA home reaching $485,328. This represented an increase of 1.6 percent compared to a year ago.
The 905 Region, with an average price of $463,779, showed a price increase of four percent compared with a half-percent fall in the City of Toronto average home price, which was $517,866.
The speed of typical price growth in November was slower than what was experienced for much of 2012, especially in the low-rise slice of the market. This was largely down to the fact the mix of single detached homes sold in the City of Toronto this past Nov changed relative to last year. Specifically, the proportion of homes that sold for over 1,000,000 dollars was down considerably. This is clear when we consider the MLS Home Price Index ( HPI ) for the GTA.
While the mixture of home types sold may have changed, market conditions stayed tight for low-rise home types. The MLS HPI tracks the price change for baseline homes to explain : a home with the same attributes over a period of time. When we have a look at price thru this lens, we find that the baseline price for major home types was up by 4.6 % in the GTA as a whole and 3.9 percent for the City of Toronto. Interest rates remain mostly unvaried, with a 5 year fixed mortgage rate of a little over 3 per cent continuing to be available.
News on the employment front was positive in November, as the Toronto seasonally changed jobless rate reduced to 8.2 percent, from 8.6 % the previous month.
At this time of year I’m regularly asked whether or not it is cautious to list one’s home for sale over the holidays, and there are actually many benefits to doing so. Consider that those viewing houses at this time of the year are more likely to be serious purchasers. As well, houses regularly look their very best when they’re decorated for the vacations, and a propitious emotional reaction to a property often prompts an offer.
I encourage you to speak to a Greater Toronto REALTOR about the various other things you should consider before selecting to make your next move and in the meantime, be certain to go to visit for all the latest updates on the market.