{"id":9555,"date":"2018-06-27T08:08:00","date_gmt":"2018-06-27T15:08:00","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=9555"},"modified":"2018-06-26T16:02:35","modified_gmt":"2018-06-26T23:02:35","slug":"9555","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2018\/06\/9555\/","title":{"rendered":"Regulatory Changes Have Led to A 44% Quarter-Over-Quarter Drop in Home  Sales from Q4 2017 to Q1 2018"},"content":{"rendered":"<p style=\"text-align: justify;\">From its peak in April 2017, to its dramatic sales drop in January 2018, the Canadian housing market has been all over the map in the past year, and one bank has taken notice.<\/p>\n<p style=\"text-align: justify;\">\u201cCanadian housing market volatility has become acute since the end of 2017,\u201d writes the TD economics team, in a recent note. \u201cRegulatory changes at both the national and provincial level (especially in BC) resulted in outsized swings in resale activity.\u201d<\/p>\n<p style=\"text-align: justify;\">Those changes include the Ontario government\u2019s Fair Housing Plan, a new mortgage stress test, rising interest rates, and an expansion of Vancouver\u2019s foreign buyer tax.<\/p>\n<p style=\"text-align: justify;\">The changes have led to a 44% quarter-over-quarter drop in home sales from Q4 2017 to Q1 2018, and a 7% decline in residential investment, despite what the TD team calls \u201csolid construction and renovation activity.\u201d<\/p>\n<p style=\"text-align: justify;\">But it\u2019s not all bad news \u2014 the team writes that the worst of the adjustment may finally be over.<\/p>\n<p style=\"text-align: justify;\">\u201cFortunately, there is reason to believe that the worst of the adjustment is behind us,\u201d they write. \u201cMonthly moves have become less dramatic, with some markets beginning to see modest increases.\u201d<\/p>\n<p style=\"text-align: justify;\">Those markets include Ottawa and Montreal, which have produced strong sales number this year, while previously hot markets like Toronto struggle to adjust to the policy changes.<\/p>\n<p style=\"text-align: justify;\">As for when things will start to warm up again, the team predicts that stronger sales activity is still a few months away.<\/p>\n<p style=\"text-align: justify;\">\u201cThe market is not expected to form a convincing bottom until the third quarter, with little reason to expect a sharp resurgence thereafter due to higher rates, more stringent qualifying rules and stretched affordability,\u201d they write.<\/p>\n<p style=\"text-align: justify;\">Meanwhile, the question of when the Bank of Canada will hike interest rates continues to worry industry watchers. The Bank hiked the overnight rate to 1.25% in January, and is widely expected to do so at least once more before the end of the year.<\/p>\n<p style=\"text-align: justify;\">The TD team predicts that, given the housing market\u2019s current state of flux, and trade uncertainty with the US, another hike is still a ways down the road.<\/p>\n<p style=\"text-align: justify;\">\u201cWith housing markets in a state of adjustment, it is unlikely that [Bank of Canada Governor] Poloz and company will want to cause undue stress, particularly with long-term rates already rising on the back of US pressures,\u201d they write. \u201cThis all argues strongly in favour of a gradual, well-telegraphed tightening of Canadian monetary policy.\u201d<\/p>\n<p><a href=\"http:\/\/news.buzzbuzzhome.com\/2018\/06\/canadian-housing-markets-volatility-become-acute-according-bank.html\" target=\"_blank\" rel=\"noopener\">TD : The Canadian Housing Market&#8217;s Volatility Has Become &#8220;Acute&#8221;<\/a> by Sarah Niedoba | Buzz Buzz Home<\/p>\n","protected":false},"excerpt":{"rendered":"<p>From its peak in April 2017, to its dramatic sales drop in January 2018, the Canadian housing market has been all over the map in the past year, and one &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2018\/06\/9555\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"class_list":["post-9555","post","type-post","status-publish","format-standard","hentry","category-market-updates"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Regulatory Changes Have Led to A 44% Quarter-Over-Quarter Drop in Home Sales from Q4 2017 to Q1 2018 &#8226; Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.roryc.ca\/blog\/2018\/06\/9555\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Regulatory Changes Have Led to A 44% Quarter-Over-Quarter Drop in Home Sales from Q4 2017 to Q1 2018 &#8226; 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