New Lending Restrictions Impact Home Sales

GREATER TORONTO - Sales of new homes and condominiums remained low in September, a result of new lending restrictions introduced in the summer, the Building Industry and Land Development Association (BILD), have reported.
“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,” said BILD President and CEO Bryan Tuckey. “It is important to recognize that 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.
Year-to-date sales of 26,392 homes as of the end of September remained nearly identical to 2010 and down 23 per cent from the record-breaking 2011. High-rise sales remain third-highest on record at 19 per cent above the long-term average. Meanwhile, sales of low-rise homes add up to the second-worst ever recorded, resulting from high prices, a lack of product choice in ground-related housing and constrained land supply.
The RealNet New Home Price Index for a low-rise home rose 15 per cent to $623,245 declined 1 per cent in the high-rise sector to $439,265.