"National sales activity lacks the momentum it had a year ago," said Gregory Klump, chief economist with CREA, which released its monthly market report Monday. "Interest rates have remained low and the economic backdrop has remained supportive for housing activity, so that should leave little doubt that recent changes to mortgage regulations are responsible for having cooled activity."
While the number of home sales across Canada fell a modest 1.7 per cent in November compared to the previous month, that activity is a whopping 11.9% down from November 2011.
The number of newly listed homes was also down, 0.9% from October to November, with the national average price for home sales off 0.8% on a year-over-year basis.
The decline has effectively returned activity to where it stood in August following the most recent tightening of mortgage regulations.
Looking at 2012, excluding December, a total of 432,861 homes traded hands over Canadian MLS systems, said CREA. That's down 0.2 per cent from levels reported over the first eleven months of 2011, and 0.8 per cent below the 10 year average for the period.
The activity drop-off has been steepest in the few months following the federal government's move to further tighten mortgage rules.
Investors have largely benefited from the increase in inventory on the market and the fewer number of buyers. Still, that isn't necessarily the case in Toronto where home prices have continued their climb despite the the slowdown in sales. That holds for small multi-family properties.