New lending restrictions impact home sales

Sales of new homes and condominiums remained low in September as a result of new lending restrictions introduced in the summer, says the Building Industry and Land Development Association.

“Changes to mortgage rules by the federal government and a tightening of lending for GTA projects by the banks have diminished consumer confidence and, ultimately, new home sales across the GTA,” says BILD president and CEO Bryan Tuckey.

Read: Canadian home sales revive, somewhat

“It’s important to recognize the industry launched fewer new projects over the summer, which resulted in fewer home sales in September.”

According to RealNet Canada Inc., BILD’s official source of new home market intelligence, a total of 2,070 new homes were sold across the GTA, marking the second-lowest total for September in 13 years.

Read: Housing prices up, sales down

Year-to-date sales of 26,392 homes as of the end of September remained nearly identical to 2010, and was down 23% from the record-breaking 2011.

High-rise sales remain third highest on record, though, at 19% above the long-term average. Meanwhile, sales of low-rise homes add up to the second-worst level ever recorded, due to high prices and a lack of product choice in ground-related housing and constrained land supply.

Read: Marathons, home sales and $4 gasoline

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.