Mortgage rules will lead to double-digit sales drop says RBC

Home sales nationally will decline 11.5 per cent following the tightening of mortgage rules by the federal government.

That’s the latest assessment from RBC Economics which says that benchmark prices will still rise but growth will be a moderate 1.6 per cent in the year ahead, compared to the 9.5 per cent seen this year.

RBC’s outlook expects sales to drop less than 3 per cent in Manitoba but approximately 24 per cent in British Columbia; the high figure for BC represents additional easing from the provincial foreign buyers’ tax.

The benchmark price should rise in all provinces except Newfoundland and Labrador, Alberta and Saskatchewan.

Overall, the RBC does not predict a crash but a soft landing but it says that there is additional potential risk to markets on both the positive and negative side and its outlook assumes that there is no further policy intervention.

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