Toronto prices may stabilize in 2018 but….
The good news is that the combined effects of higher interest rates and new mortgage rules will see Toronto’s housing market balance out over the course of 2018. The bad news? A serious lack of land supply coupled with a rapidly increasing population means it won’t last.
At least, that’s what CIBC Senior Economist Benjamin Tal has predicted in his latest report, released today.
Tal tells BuzzBuzzNews that 2018 will see Toronto’s housing market soften as it adjusts to higher interest rates and new mortgage rules.
The new rules will require all uninsured borrowers to qualify against the Bank of Canada’s five-year benchmark rate, or at their contract mortgage rate plus an additional 2 percent.The rules are intended to ensure that uninsured borrowers can withstand higher interest rates. The overnight rate —which influences mortgage rates and sat at a historically low 0.5 percent earlier this year — has been raised 50 basis points since July, with some predicting a third hike on December 6.