Toronto home sales picked up in November as some buyers apparently “rushed” into the market ahead of tough new mortgage rules, but don’t expect prices to take off any time soon.

The Greater Toronto Area’s housing market hit a fever pitch in the spring – with the average price soaring to $920,791 before the province stepped in with a suite of regulations.

Now, the market is facing more regulation: new stress tests from the federal banking regulator.

“Sales overall are down by around 13 per cent [in November], which is actually an improvement compared to the 20- to 30-per-cent declines we were seeing in previous months,” John Pasalis, president and broker of record at, told BNN in an email.

“This might be a last-minute rush as some buyers rushed to get in before the new OSFI changes are put in place.”

When it comes to price, Pasalis expects a “roughly” two-per-cent year-over-year drop in the Greater Toronto Area.

“Even if prices remain flat going forward, by February-March we should see average prices down by roughly 15 per cent compared to the peak reached in the first quarter of 2017.”

The country’s banking regulator, the Office of the Superintendent of Financial Institutions, has set a Jan. 1 deadline for the big banks to impose tough new mortgage stress tests for all borrowers. suggests it could cut a family’s purchasing power by up to 21 per cent.

OSFI made clear it expects the banks it regulates to comply, where possible, with the “principles and expectations set out” as of October 17 – the date the changes were announced.

Still, industry observers feel there would be opportunities for buyers to avoid the new stress test before the new year because lenders simply wouldn’t move that quickly.

That’s led to speculation some buyers in pricier markets such as Toronto and Vancouver would jump into the market ahead of the deadline.

This week, the country’s largest bank -- RBC -- told analysts it has seen a “little bit of pull forward this fall,” when it comes to its mortgage business.

Bank executives said some customers were “surprisingly aware of exactly what the stress test is about and have decided to move more quickly.”

Lauren Haw, CEO of Zoocasa, says they have “felt this return of buyer urgency all month.”

“Some of this increase in activity can be attributed to buyers looking to get ahead of the mortgage changes in January,” Haw told BNN in an email, adding others are wading into the market after waiting for a “sharp price decline” that didn’t come.

RBC told analysts it expects “mortgage growth to slightly moderate to the mid-single digits” as the housing industry “digests the changing regulatory landscape.”

When it comes to the stress tests, Haw says the impact could be muted by the fact that “most buyers” do not push the mortgage loan amount to their “absolute maximum.”

“There are buyers that spend the absolute maximum, but most commonly do not.”



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