21 June 2011

According to recent Canadian Real Estate Association (CREA) report, home resale prices fell by 0.6% in May from April. One of the reasons is the implementing of new mortgage rules that took effect in the spring. Actually, it was the first full month data reflecting the new rules’ effect.
The government has tightened the mortgage rules three times since 2008 in order to solve the housing market problems and lower the household debt levels.
The CREA report showed Vancouver had a strong influence in May on the average national price – they rose by 8.6% from a year earlier to $384,507. Such a price gain was noted in the past several months, because of very high prices in Vancouver and Toronto.
Jim Flaherty said the government isn’t going to tighten the mortgage rules again after the latest set, which concerned mortgage amortization and refinancing.

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