While sales improve, CREA urges caution
Home loans for existing homes picked up nationwide in January, according to the Canadian Real Estate Association, but analysts say the coming mortgage changes may be skewing the data.
According to the report, seasonally adjusted home resale activity increased by 4.5 percent last month compared to December, reaching its most rapid pace since April. Economists said that given the government’s mortgage changes, which are set to take effect soon, it was unsurprising to see sales increase. In the meantime, CREA cautioned officials about further regulatory changes.
“It will take some time before the longer term impact of the latest mortgage regulations on the housing market can be known,” said Georges Pahud, CREA’s President. “For that reason, further action shouldn’t be taken until the impact can be measured.”
Perhaps looking to take advantage of some buyers’ urgency, the number of available homes also increased by 3.9 percent from December, the largest jump in 10 months.
Many are predicting a strong rush of sales over the next month, as the government phases out support for 35-year mortgages by March 18 to reduce Canadian’s household debt levels. Analysts with real estate website Zoocasa.com told the Financial Post last month they saw a jump in traffic following the announcement.