Fewer homes in the summer. Lower average home selling price in the summer. That’s this year’s headline. But it could also apply to last year or the year before or the year before that.
What hasn’t been said much is that house prices almost always go up in the Spring and fall during the summer. 
This year isn’t much different. Except that this Spring, we saw ridiculous price increases in the 20% range.
That’s just not sustainable. Check out some of these graphs from Canadian Real Estate Association.
This summer, house prices have fallen a little more than average. And sales are also down compared with the last 2 years. But listings haven’t increased. In 
fact, listings dropped in July signalling we could have reached the bottom.
Hey, if we were in a housing bubble, you would have seen new listings continue to spike up. That’s when we know the 
market will have changed gears.
PENT UP BUYER DEMAND?
Some are speculating that we could see a busy Fall market this September or October. The Fall has historically been the 2nd busiest housing market. If we look at Vancouver in 2016, after they announced their 15% Foreign tax rule, their market went soft and was very quiet. Many pessimists were saying it was the bubble bursting.
Six months later and Vancouver’s market is busier than ever. Fully recovered. The initial shock of the Foreign tax rule came and went. We could see that same sort of comeback for Toronto.
A WORD TO OUR FEDERAL GOVERNMENT AND REGULATORS…
To the Federal govt: Please, no more mortgage rule changes. Let the market absorb all the massive changes already made. Listen, I’m telling you with 28 years of mortgage lending experience.. I can’t recall when qualifying for a mortgage has ever been harder… and I was around during the last real estate recession of 1990.
Non-bank lenders are being penalized as their cost of funds are higher than BIG SIX BANKS (thanks to the new Fed govt mortgage rules), hence driving more customers towards the BANKS… THE WINNERS: BIG SIX BANKS. THE LOSERS: CONSUMERS. Let’s bring back competition among Mortgage Lenders… and let’s make mortgage financing accessible again. The pendulum has swung way too far to the conservative lending side.
BANK OF CANADA RATE HIKES ON HOLD?
The Bank of Canada hiked the Prime rate by 0.25% in July. It was headline news for weeks. Many said this was the 1st of many hikes to come. Today, the forecast is for a possible October hike. But that isn’t a sure thing. And if the uncertainty with the housing market continues or if the NAFTA trade agreement gets turfed like President Trump says, you can bet the Bank of Canada governor will think twice about raising the rates. More likely a rate drop!
Stay tuned.. Maybe we’ll see a Spring market in the Fall?
Your best interest is my only interest. I reply to all questions and I welcome your comments. Like this article? Share with a friend.
Steve Garganis 416 224 0114 steve@mortgagenow.ca
