House prices and market activity continue to increase, especially in Vancouver and Toronto, even after measures taken by Finance Minister Bill Morneau, which took effect in February. Increasing the required down payments for home purchases valued above $500,000 was intended to stabilize a hot real estate market, but home prices in some areas have increased more than expected. Maybe it’s too early to tell if the recent rule changes will have a real effect.
As mentioned by Mr. Morneau:

“We are only one month into that change and we want to make sure that our housing market stays one that is working effectively. As we see challenges, we will of course think about ways that we can respond that ensure that our market remains stable”.

One real possibility causing the Canadian real estate prices to continue to accelerate could be foreign ownership.
CMHC is looking for new methods of tracking and measuring foreign buyers, and the impact this could have in overall home prices. As quoted recently by CMHC Chief Economist Bob Dugan, “It remains a top priority for CMHC to continue to get more information on foreign investment in Canada’s housing market”.
As we stated last week, the Bank of Canada decided to keep its benchmark lender rate unchanged at 0.5%, indicating that they feel there’s no need for further cuts to stimulate the economy. “It does appear that the positive forces at work in the economy are starting to outweigh those that are negative,” said a bank spokesperson. This is good news for everyone looking to buy or refinance today.
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