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This marks the largest gain of any of the provinces. With previous changes to mortgage regulations, demand rose between the time changes were announced and their implementation, and invariably fell in the months immediately after being implemented, before recovering to long-term levels, according to Gregory Klump, chief economist for CREA.

“By contrast, recent changes to mortgage regulations were in force more quickly after being announced, so home buyers had far less time to react,” says Klump. “As a result, demand didn't pick up just before the changes took effect, while sales declined once they did."

Home sales in Canada decreased slightly by 0.8 per cent between September and October 2012, an indicator that the country’s housing sales may soon be headed in the right direction, according to the Canadian Real Estate Association (CREA).

"While we always caution that housing market trends at the national level can and do run counter to trends in many local markets, the decline in activity in August was definitely the result of much of the country moving in the same direction," said Wayne Moen, president of CREA. “That said, many smaller and more affordable markets bucked the national trend.”

Declines were reported in about a third of all local markets representing 80 per cent of national activity, with monthly sales declines in almost all large urban centres, including Greater Toronto, Greater Montreal, Greater Vancouver, the Fraser Valley, Calgary, Edmonton and Ottawa.

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