The Canadian housing market continues to soften and the process is not over yet. The gravitational forces generated from the unsustainable surge in the Vancouver market in 2015 and in Toronto in 2016 and early 2017 are fading away, but the impact of OSFI’s B20 quali cation rules is now in full force.
Mortgages outstanding have slowed down to a year-over-year rate of 4.9%—the slowest pace since mid-2014. A growing number of buyers are finding it more difficult to close a transaction under the new rules, while some are being forced to find alternative sources of funding. New-home builders are starting to delay new projects, and from what we are hearing, the main damage to housing starts will be felt next year.