New home sales in Toronto plunged 64% in the wake of government’s changes to insured mortgages (30yr to 25yr) and home equity line of credit restrictions (80% max to 65% max) which took effect in July.

Lowest August on Record

Reader Corey emailed the above comments and a news link from the Canada BILD Association: New Home Sales Slip in August.

According to RealNet Canada Inc., BILD’s official source of new home market intelligence, the 1,242 homes sold in August 2012 add up to the lowest monthly sales since 2009 and the lowest August on record. Year-to-date sales have remained on par with 2010 but below its record-breaking 2011 predecessor.

“The federal government has been working on reducing household debt levels and recently adjusted mortgage lending rules. August was the first full month with the new rules in place and it appears these regulations have affected consumer confidence, resulting in significantly reduced sales of new homes,” explained BILD President and CEO Bryan Tuckey. “BILD will be carefully monitoring new home sales during the next three months to see if this decline becomes a trend.”

August ’12 Low Rise High Rise Total
Region 2010 2011 2012 2010 2011 2012 2010 2011 2012
Durham 182 206 119 7 7 12 189 213 131
Halton 241 610 75 24 283 15 265 893 90
Peel 202 281 267 89 63 66 291 344 333
Toronto 18 47 22 751 1,027 469 769 1,074 491
York 356 385 114 108 587 83 464 972 197
GTA 999 1,529 597 979 1,967 645 1,978 3,496 1,242
GTA % Chg -60.95% -67.21% -64.47
Jan-Aug 11,212 12,357 10,710 12,347 18,055 13,591 23,559 30,412 24,301

“Slip” hardly seems the operative word. Crash is more like it.

Also consider Bernanke Declares War on Canadian Economy (Rest of the World Too)

Addendum:

I said Canada previously but those sales are specifically the Toronto region. 

Mike “Mish” Shedlock
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