Tighter Mortgage Rules Slow House Sales

Posted: April 5, 2013 in Uncategorized

WATERLOO REGION — House sales fell across Waterloo Region in March as potential buyers felt the impact of more stringent mortgage rules.

Home sales were down 9.4 per cent in Kitchener and Waterloo, and 4.1 per cent in Cambridge compared to March 2012.

A total of 607 residential properties changed hands in March, down from 670 a year ago, the Kitchener-Waterloo Association of Realtors said Thursday in its monthly report.

The total included 393 detached homes, 107 condos, 58 semi-detached units and 43 townhouses. Sales of detached homes and condos slid 12 per cent, but rose 5.5 per cent for semi-detached units and 7.5 per cent for townhouses.

Association president Dietmar Sommerfeld blamed tighter mortgage rules, which include shorter amortization periods and larger down payments, for the slump in sales, but said low interest rates “should help foster a healthy upcoming spring market.”

He took some solace from the fact the sales slump in this area was less than 10 per cent. Sales fell 17 per cent in Toronto and 18 per cent in Vancouver during March.

Though real estate agents never like to see a drop in sales, Sommerfeld applauded moves by the federal government to tighten mortgage rules and prevent banks from lowering interest rates too much.

“A more stable market is better in the long run,” he said.

Despite the decline in sales, average prices in Kitchener and Waterloo rose 2.9 per cent to $320,229 in March. Detached homes sold for an average of $367,714, an increase of 3.4 per cent from a year ago.

For the first three months of the year, sales were down 7.6 per cent to 1,397 homes but kept close to the 10-year average, the association said.

In Cambridge, 278 residential properties changed hands in March compared to 290 a year ago. Average prices fell 1.5 per cent to $298,259.

The total dollar volume of sales declined 5.6 per cent to $82.9 million, the Cambridge Association of Realtors said.

For the year to date, sales are up 1.6 per cent in Cambridge.

Meanwhile, average house prices inched up across the country during the first quarter of the year, Royal LePage said in a report Thursday. Prices rose 2.2 per cent for a two-storey detached home, 2.4 per cent for a bungalow and 1.2 per cent for a condo, the national real estate company said.

Vancouver continues to have the most expensive real estate in the country. Two-storey houses and bungalows there cost more than $1 million on average, Royal LePage said.

Article is from The Record


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