TORONTO — Sizzling sales and pumped up prices in the Vancouver real estate market drove up average home prices last month, but the increases will begin to recede as new mortgage reforms further cool demand, says the Canadian Real Estate Association.
Home sales in Vancouver skyrocketed 24.7 per cent over a year ago, but nationally, Canadians saw a decrease of 6.3 per cent year-over-year, CREA said in its February sales report released Tuesday.
A record number of multimillion-dollar home sales in Vancouver drove the national average home price up 8.8 per cent year-over-year to a record $365,192 in February, it said.
“When you take Vancouver out of the equation, the year-over-year increase in the national average price drops to 3.4 per cent,” said CREA’s chief economist Gregory Klump. “While that’s still stronger than in the past six months or so, national average price gains may recede after tighter mortgage regulations take effect in March.”
The rules, being introduced Friday, which cut the longest possible amortization period from 35 years to 30 years, are designed to curb high-risk borrowing and could drive some buyers out.
Doug Porter, deputy chief economist at BMO Capital Markets, said activity in the housing market appears to be simmering down just as the tighter mortgage rules are set to take effect and added that the figures would have been even softer if it had not been for strength in Vancouver.