The Toronto Real Estate Board (TREB) announced that 2013 brought the 3rd best July on record. Not only did sales rocket by 16% but average sale prices also shot up by 8% to $513,246. This is particularly good news for an industry that typically sees a summer slowdown July and August.
The implication of these strong numbers is that tighter mortgage rules imposed by the Department of Finance (DOF) have worked their way through the system. We are back on track with a healthy growing market. Although many rounds of mortgage tightening were painful, it’s left us stronger in the end. The market is now growing with strength and security. Buyers must now accept higher monthly payments to accelerate the elimination of their mortgage. First time buyers must come up with larger downpayments to reduce mortgage payments and many homeowners have been forced to take more secure 5 year fixed mortgage terms.
The question remains whether Ottawa will accept solid growth or continue to blindly squash any growing market. The DOF is so focused on consumer debt reduction ratios that it refuses to accept any real estate growth as a positive economic condition. A myopic view that could do more damage than good if left unchecked.