New mortgage rules cool Laval housing market

Chomedey, Sainte Dorothée hit hard
By Robert Frank
www.thesuburban.com


The federal government’s efforts late last year to cool-off Canada’s overheated real estate market have proved effective in Laval.

In the wake of new rules aimed at preventing an American-style mortgage-lending crisis, the island city’s residential market now shows clear signs of saturation with a double-digit drop in the number of properties sold during the last three months of 2012.

The Quebec Federation of Real Estate Boards reported, Jan. 22, that new rules limiting insured mortgages to 25 years left Laval residential real estate sales ending up flat for the year 2012.

The number of dwelling sales plummeted 15 per cent between October and the end of December, completely wiping out gains from earlier in the year.

Single-family home sales fell 14 per cent, plexes (buildings with 2-5 dwellings) were down 15 per cent and condominium sales plunged 19 per cent during the fourth quarter.

“We became accustomed to seeing record-setting condominium sales year after year but, in 2012, sales fell for the first time since 1995,” QFREB market analyst Paul Cardinal observed in a statement. “Qualifying for a mortgage became more difficult for some first-time buyers during the second half of 2012.”

Prices so far have resisted the softening market, rising faster than the inflation rate. Single-family home prices were up by 4 per cent in 2012 and prices of condominiums and plexes rose five per cent for the year.

The median price of single-family Laval home was $282,000 last year. Comparable numbers for condominiums and plexes were $208,000 and $392,500 respectively during 2012.

The Chomedey market was hit harder and owners of single-family dwellings saw the equity value of their homes fall 2 per cent during the last three months of the year, as sales plunged by 22 per cent. During the same period, the price of condominiums shot up ten per cent, despite a 23 per cent decline in sales. For the year as a whole, Chomedey condominium prices remained robust up 3 per cent to $415,000.

Sainte Dorothée sales were down further still during the last quarter. They fell by 27 per cent, offsetting robust growth earlier in the year and lowering overall 2012 sales growth to 2 per cent.

Laval West district reported a decline in total residential sales of 11 per cent last year. The median price of a single-family home there 2012 remained flat at $220,000, the same amount as the year before.

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