12 March 2018

“In addition to it, most of the policy changes from the previous year focus on the higher end of the single detached housing market.”

On a seasonally adjusted basis (winter tends to be less active for Canada’s construction sector), February was the strongest month since 1990.

Construction is growing in Toronto, while sales are going down, following numerous rules changes on different levels, aimed at cooling home prices growth. The previous change took effect on January 1, making it more difficult to qualify for a mortgage. That’s why many buyers hurried to make a purchase in December in order to avoid the stricter regulations.

Last month, home sales dropped by 35% on a year-over-year basis to 5,175 units, says the Toronto Real Estate Board. As a result, it was the weakest February since 2009.

Meanwhile condo prices keep rising, this time showing an annual increase by 20%. In case of single-detached homes, prices were down by 12% annually.

Factors that favor condos are still working, with growing immigration pushing the market demand. As the main influence of the tighter rules focus mostly on limiting the size of mortgage credit, such changes may support the less-expensive condo market.

“Almost all of the new activity last month was seen in the condo sector,” – Kavcic noted. “The current demographic situation in labor market and real estate demand in this sector remain strong.”