Mortgage Change Slows Canada Housing Market

House prices are rising in Canada – but fewer homes are selling, according to the latest figures from estate agents Royal LePage.

Statistics for the last quarter show average house prices for two-storey homes were up 4% year-on-year to CAN$403,747.

Detached bungalows increased 4.8% to $366,773, while standard condos rose 1.8% to $243,607.

Most cities saw modest price increases in the third quarter, but fewer homes were sold compared to the same period in 2011.

The drop in transactions followed the government cutting five years off the maximum 30 year term for a mortgage, increasing monthly repayments at a stroke.

With first time buyers accounting for between a third and a half of all home purchases, making mortgages more expensive had an immediate impact on the market, said the firm.

Prices city by city

House prices increases