The Canadian Real Estate Association (CREA) announced today that 2016 was a record-breaking year for home sales in Canada.

But 2017’s performance likely won’t stack up, the association, that is among Canada’s largest trade groups, added.

The total number of homes that changed hands in Canada through the resale market increased 6.3% in 2016 compared to the previous year’s tally, driven by activity in the first half of 2016.

Gregory Klump, CREA’s chief economist, suggested mortgage rule changes rolled out in the second half of last year will dampen home sales throughout 2017.

“Home sales are unlikely to benefit the Canadian economy as much in 2017 as they did in 2016,” says Klump in a statement.

The rule changes include tougher mortgage stress testing, so those applying for insured mortgages will have to qualify against higher interest rates.

“New regulations mean that in order to qualify for a mortgage, home buyers will either have to save longer for a bigger downpayment or purchase a lower priced home,” he explained.

“In urban centres where the latter are in short supply, that’s likely to translate to fewer sales,” said Klump.

This view is in line with those from one of the country’s biggest real estate franchisors.

Royal LePage said in its latest market survey, published last week, that this year would be a return to normal for the Canadian housing market. It forecasted moderating price gains moving forward.

In December, the aggregate price of a Canadian home, including both condo units and houses, was $582,000, up 14.2% from a year earlier, according to CREA’s home price index.

Despite falling prices, Greater Vancouver remained the most expensive major market to close out 2016.

The aggregate price of a home there was $897,600 in December, an increase of 17.8% from a year ago, though down 1% compared to November.

Neighbouring Fraser Valley posted the largest year-over-year price gain last month. Its aggregate price was a more affordable $628,800, having increased a whopping 27% from that month last year.

Like Vancouver, in the Fraser Valley prices fell from November to December, albeit only by 0.7%.

The Greater Toronto Area, now widely regarded as Canada’s hottest big real estate market posted the second-greatest year-over-year increase.

GTA home prices soared 21% year-over-year to $694,900 in December, or about 0.8% over November.

In separate commentary also published today, BMO Senior Economist Robert Kavcic noted, “Toronto keeps doing its thing.”

2016 Was A Record Year for Canadian Home Sale. Will 2017 Be, Too? by Josh Sherman | Buzz Buzz Home