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Official Says Canada Home Sales Could Fall 8% Amid New Rules

  • Sales drop would be temporary: Department of Finance spokesman
  • Overall long-term impact of Finance regulations ‘positive’
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House Prices Jump Another 20% in Toronto

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Canada’s finance department projects home sales could fall as much as 8 percent in the first year after new housing regulations are implemented, before rebounding, based on an analysis using historical data.

Finance Minister Bill Morneau announced the new rules Monday. They include a stress test for home buyers and increasing the eligibility requirements for mortgages to get insured, and they come into effect as early as Oct. 17. The announcement has already eroded mortgage finance company shares and prompted forecasts of slipping mortgage growth at the banks, as well as fewer home purchases and a price cool-down.