“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," said Bryan Tuckey, president of the Building Industry and Land Development Association (BILD). "BILD will be carefully monitoring new home sales during the next three months to see if this decline becomes a trend."
The 1,242 now houses and condos sold throughout the GTA in August 2012 represent the slowest August on record with the association and the smallest number of sales since 2009.
The drop provides the latest statistical corroboration that the move to lower the amortization ceiling for insured mortgages has had a chilling effect on the market.
That applies mostly to homebuyers and newbie investors and not seasoned property buyers relying on existing equity in their real estate portfolios to fund new purchases.
The latter has actually benefited from the slowing sales as sells, especially condo developers begin to show greater flexibility in their pricing.
Still, those investors haven’t been enough to compensate for the loss in homebuyers.
"Confidence in the new homes market is crucial to a healthy economy in the GTA," added BILD Chair Paul Golini Jr. "This industry employs more than 193,000 people, making it one of the largest contributors to economic growth in Ontario."
Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate