Tightened Lending Rules Slowing Some Markets

  According to a recent article in the Toronto Star, tighter mortgage rules are starting to have an impact on real estate sales in some markets.  Home sales dropped 5.8% across Canada from July to August, the largest month-over-month decline since June 2010, according to the Canadian Real Estate Association (CREA).
  Sales activity was down almost 9% nationally in August over August 2011 “providing the first clear indication that the recent changes to mortgage regulations aimed at cooling the market are working as intended,” said CREA chief economist Gregory Klump Monday.
  Such was not the case in the Georgian Triangle last month as unit MLS®
sales in our market were up 17% in August while dollar revenue which totaled $60.1 million was up 25%.  In a market such as ours, a significant number of sales are for recreational purposes and we are seeing an increased number of retirees moving here.  Many of these sales are cash purchases with no mortgage so tighter lending rules may have less of an impact here than elsewhere.
  This is a good example of the divergence that can exist between markets and sometimes even neighbourhoods.  What happens in Toronto, Vancouver or Calgary can be very different from a Collingwood area or Muskoka market which tend to be oriented towards a different market and or demographic.  A good example of different market conditions close to home is the condo market.  Collingwood MLS® condo sales thus far in 2012 are running almost dead even with last year with 127 units sold compared to 129 last year.  Meanwhile in the Blue Mountains, MLS® condo sales this year are down 30% so to make a broad brush statement amount market conditions in general is misleading. That's why a more focused look at a specific property type, area or even neighbourhood may be necessary in order to provide vital and accurate information to a seller(s) or buyer(s) in assisting them with making informed decisions about their real estate investment(s).  This is the type of critical information that we as REALTORS® need to provide our clients.  Anything less and we are simply not doing our jobs.