House prices are dropping down in Canadian cities as new rules steps in

In the Canadian cities the price of the houses fell in a preponderance in the very first month of January according to the mortgage rules at the chief banks.

The very up-to-the-minute edition of the Teranet National Bank Index reflects the falling in the price of houses of the seven among eleven cities.

Each city including Ottawa Gatineau, Hamilton, Calgary and Edmonton , Halifax, Quebec city and Winnipeg saw sheer drop for a single month with each city’s price index down at least one percent.

House prices increase swiftly showing a diverse story in Vancouver. The price index of the city is up 1.2 percent on the month and up nearly 17 percent over the past years.

It rose 0.3 percent in January with incubation of Vancouver said by the National bank senior economist Marc Pinsonneault, whereas without Vancouver price index would have decreased .

“The fact is that Vancouver’s home resale market remained tight even after the introduction of a tax on acquisitions by foreigners,” Pinsonneault wrote in a client note Wednesday.

After the introduction of similar tax in Toronto, in last April there the market turned from tight to balanced. In Toronto price of the houses are turning positive for the first time in January in the six months rising a meek of 0.2 percent. But 7.2 percent has fallen in price in the regions in July.

“STRESS TEST” should be passed by the borrowers of traditional mortgages to ensure that they can still afford their mortgage at a rate that is two percent higher than the offered rate to them. This is according to the new mortgage rule.

According to the mortgage comparison site Ratehub the rule will decrease buying power by 21 percent. This rule is applied only to the prime banks that are overseen by the by the federal banking regulator, OFSI. They do not apply to substitute lenders such as credit unions.



Labonita, The Blogging Connection

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