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End in sight for crazy Toronto and Vancouver housing markets

May 17th, 2016  |  Canadian Business

The new Canadian Real Estate Association (CREA) report on the national real estate market suggests that after years of unfaltering growth, Toronto and Vancouver’s markets may be slowing to more reasonable levels.

April saw national home sales hit their highest number on record, but in the nation’s two hottest housing markets, things were actually pretty slow. According to Metro News, there were 57,669 homes sold over the Multiple Listing Service in April, marking a 10.3% increase over the previous year.

Nationwide, new listings were down 3.7% In Toronto it was even worse, falling 10.3%.

"As a result, many homeowners are deciding to stay put and continue accumulating capital gains. That’s keeping listings off the markets at a time when they are already in short supply," said Gregory Klump, chief economist for CREA.

Looking at monthly figures shows how Toronto and Vancouver sales have all but stalled since March, with slight dips in that month and very meagre gains in April.

TD Economist Diana Petramala suggested that the two month stall could be a sign that the government’s new mortgage rules are actually having the desired effect of gently slowing down the market in the most risky markets. However, the higher minimum down payments are generally offset the low interest rates and comparatively less expensive real estate across the country.