- Debt-to-disposable income ratio has been moderating due to regulatory changes in mortgage lending and tightening of monetary conditions that have slowed down debt growth.
Source: Statistics Canada - Canada home sales are reverting to their 10-year average.
Source: Canada Real Estate Association - Toronto house prices have significantly dropped since their peak due to Ontario’s foreign buyers tax, revised B-20 guidelines and interest rate increases (about 80bps in 5yr mortgage rate since March 2017) . The y/y HPI monthly rate drop in July 2018 has matched the highest monthly drop during the 2008-09 recession.
- In contrast, Vancouver house prices were negatively affected by BC’s foreign buyers tax for only a relatively short period of time and have been weathering the above regulatory and interest rate changes.
