The number of home resales fell 5.6 per cent from May to June on a seasonally adjusted basis. Activity was down in three-quarters of the country
, with the largest declines in the major urban centres of Toronto, Vancouver, Calgary, Edmonton and Ottawa. Resales also dropped significantly in Toronto suburbs such as Burlington and the nearby city of Hamilton.
Under federal banking rules, borrowers must prove they can make their monthly mortgage payments at an interest rate that is at least two percentage points higher than that of their actual loan contract; for instance, with a five-year fixed rate of almost 5 per cent, a borrower would have to show they can make their payments with an interest rate of almost 7 per cent.
Kristina Legault, a realtor with Century 21 Creekside Realty, which serves the Chilliwack area in B.C., said some buyers simply cannot get financing now. “The interest rate really has an effect on them,” she said. Properties are taking longer to sell, even as more people are putting their homes up for sale. The number of new listings across the country increased 4.1 per cent from May to June. Phil Soper, the president of Royal LePage, said he will be watching the pace of new listings; if it spikes relative to weakening demand, it will lead to a drop in prices, he said.
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