TORONTO - The national average price for homes rose 8.8 per cent year-over-year in February, but a group of Canada's realtors suggest they might not stay at those levels for much longer as stricter mortgage rules come into effect.
The Canadian Real Estate Association said the national average price for a home rose to $365,192 in February, but that includes a record number of multimillion-dollar home sales in the Vancouver area that skewed the average price numbers.
"When you take Vancouver out of the equation, the year-over-year increase in the national average price drops to 3.4 per cent," Gregory Klump, CREA's chief economist said in a statement.
"While that's still stronger than in the past six months or so, national average price gains may recede after tighter mortgage regulations take effect in March."
In its monthly report, the association said national resale housing activity in February ran close to the five-year average for the month.
Seasonally adjusted home sales were down 1.6 per cent nationally over January, as sales eased off in about two-thirds of markets, offsetting increases in activity in Vancouver and Calgary.
About 41,283 homes were sold last month across the country on CREA's Multiple Listing Services, down 2.2 per cent from the 42,230 sold in January.
The number of new listings was up 1.5 per cent in February, as higher demand and stable prices lured sellers into listing their homes after reluctance amid the softer housing market last summer.
CREA said the housing market remained balanced in February as sales activity and supply remained stable. It said its national measure of market balance remained little changed from the previous four months.
The new mortgage rules expected to affect pricing begin Friday and will make the maximum payback period 30 years -- resulting in somewhat higher regular payments than with the 35-year amortization that has been the choice of about 30 per cent of home buyers.
The rule changes will increase the monthly payment on a $300,000 mortgage at four per cent interest by $105 -- but will also reduce total interest paid by $42,288 over the life of a mortgage because it's repaid five years sooner.
Dropping the amortization to 30 years will cut buyers' maximum possible purchase price by six to seven per cent. That means someone who qualifies for a $300,000 mortgage could afford a home that's about $18,000 $21,000 less expensive.
