15 May 2018

“The stress test which applies to homebuyers with more than a 20% down payment, kept affecting the sales activity last month,” – CREA President Barb Sukkau said.

In April, both home sales and prices went down. CREA says the average real estate price was $495,000 – it’s 11.3% down from April 2017.

Nevertheless, just like earlier, the activity in Toronto and Vancouver is distorting the national numbers. When those markets were extremely hot, they were pushing the average results up. Now, as they cool down, the averages are also lower.

In case we exclude the two markets from calculation, the average selling price will be $386,100, and the annual drop will reach only 4.1%.

“The report is quite disappointing,” – TD Bank economist Rishi Sondhi noted. “Home sales were down and revised March numbers also show a less optimistic picture than previously thought.”

In Sondhi’s opinion, the new stress test rules and new taxes for foreign buyers in Ontario and British Columbia will keep restraining the market activity.

At the same time, we may see the signs of stabilization later this year and into 2019 due to healthy labour markets and population growth, Sondhi added.