The pace of rising home prices slowed in Canada in the second quarter due to softness in the Greater Toronto Area market, according to a report by Royal LePage.
Royal LePage chief executive Phil Soper said Tuesday new federal mortgage stress-test measures helped slow the real estate market.
“It was a spring market that never blossomed,” Soper said in a statement.
“The new federal mortgage stress-test measures slowed the market to a standstill in much of the country, as some families adjusted their expectations in a world with lower borrowing capacity, and others not impacted by the OSFI regulations moved to the sidelines, adopting a ‘wait and see what happens to home prices’ approach.”
However, in its outlook, Royal LePage said it expected the aggregate price of a home in Canada in the third quarter to be up 2.2 per compared with a year ago.
“The market has begun to absorb and adjust to the new realities; we expect an uptick in sales volumes and prices during the second half of 2018,” Soper said.
The Royal LePage national house price composite showed the price of a home in Canada increased 2.0 per cent year-over-year to $613,968 in the second quarter of 2018.
That compared with a 6.2 per cent year-over-year increase in the first quarter of the year.
The real estate brokerage firm said the slowdown in the rise in prices came as some regions in the Greater Toronto Area saw prices fall compared with a year ago.
The national median price in the second quarter of a two-storey home rose 0.8 per cent year-over-year to $720,504, while the median price of a bungalow climbed 1.8 per cent to $512,979. The price of condominiums rose 8.1 per cent year-over-year to $435,421.
In a separate report, Sotheby’s International Realty Canada said the market for homes over $1 million in Montreal in the first half of the year hit a record as it gained 24 per cent compared with a year ago.
In Toronto, Sotheby’s said sales of homes over $1 million were down 46 per cent compared with a year ago, however the firm noted that 2018 sales volume trended in line with 2015’s pre-surge levels.
Home sales over $1 million in Vancouver fell 19 per cent compared with a year ago, while Calgary saw a drop of 11 per cent.