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December Market Stats, New Mortgage Rules & Interest Rate Hikes

Welcome to 2018! A new year in real estate is well on its way. However, in order to have a better idea of what’s to come, let’s have a review of how 2017 wrapped up.

Back in October, new B20 guidelines, otherwise known as Residential Mortgage Underwriting Practices and Procedures, were dropped on us. The regulation changes came into effect January 1, 2018. This rule puts a stress test on buyers putting down more than 20% on property purchases. The same rule has applied for those putting down less than 20% since January of last year. This instilled pressure on buyers and those with mortgage pre-approvals to make purchases with little supply in the market. Around the same time, Bank of Canada announced a rate hike increase of .25%.  

With those market changes considered, as we reflect on the market performance of December it’s important to note that we didn’t see a big rush to beat out the new rules. This could be because this new mortgage rule is only expected to affect 1 and 6 buyers.

All things considered, here are December 2017’s market stats for Toronto’s central core performance.


  1. Average selling price: $636,757

  2. Total sales: 599

  3. Average days on market: 21

  4. Sales price growth: up 12.23% from December 2016

Semi-detached & Row houses

  1. Average selling price: $1,055,943

  2. Total sales: 113

  3. Average days on market: 30

  4. Sales price growth: up 10.76% from December 2016

Detached house

  1. Average selling price: $1,816,614

  2. Total sales: 138

  3. Average days on market: 27

  4. Sales price growth: up 2.17% from December 2016

In summary, we saw a strong growth in condos and semi/row house sales in comparison to December 2016. And we are likely to see these sections continue to perform well in the new year given their average price points paired with new mortgage rules and insurance rate hikes. We saw a small growth in detached housing sales which is positive news given the fact the December is generally a slower month for sales. Also, the growth of sales is small because of the high average price.

What’s to come in 2018?

Bank of Canada is again raising interest rates (starting tomorrow – January 17) another .25%. Which means prime rate interests have increased .75% since summer 2017 and fixed rates have gone up about 1.2% since spring 2017.

As stricter mortgage stress test apply and interest rates increase, real estate may be set out to a slow start as buyers (and sellers) find their footing and become more educated of how these changes are going to affect their purchasing power. And this extra cold weather is definitely affecting things.

In terms of mortgages, here are a few things to keep in mind:

  1. Credit unions are still underwriting mortgage deals under the old rules meaning the stress test for those putting 20% down does not apply.

  2. If you were pre-approved for a mortgage by May 31, 2017, some lenders are providing buyers an extension under the old rules for 2018 closing dates.

If you have any questions about how these changes will affect you, please don’t hesitate to contact me – I’m here to help! 🙂


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