The data is in: Here are the winners and losers of the new mortgage rules so far

Baby, it's cold outside in Montreal - but real estate prices are staying hot. Christinne Muschi/Bloomberg via Getty Images

January was the first month in which the Canadian housing market had to deal with new federal mortgages rules. And the numbers are now in: Home sales dropped 14.5 per cent compared to December, while prices slipped 2.4 per cent, according to data released on Thursday by the Canadian Real Estate Association.

The plunge reflects homebuyers and sellers rushing to finalize transactions in November and December, before the new rules took effect on Jan. 1. Prices, however, appear to be holding up, in part because there is now a shortage of homes for sales. New listings dived 21.6 per cent during the month, an eight-year low.

READ MORE: Canadian home sales drop 14.5% from December to January as new mortgage rules kick in

Economists broadly expected a pullback in homes sales and say that may continue for a few more months. Later in the year, we’ll probably see a rebound in both demand from homebuyers and home listings from homesellers, they believe, although activity will remain subdued.

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“Our outlook for 2018 calls for a second consecutive modest annual decline in resales and sharp moderation in price appreciation,” RBC economist Robert Hogue wrote in the bank’s monthly housing update.

READ MORE: New mortgage rules 2018: A practical guide

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Generally speaking, this means homesellers might take longer to find buyers and might have to adjust their price expectations. But homebuyers aren’t exactly winners, either. The new mortgage rules, coupled with rising interest rates, make it harder to qualify for larger mortgages – but they likely won’t cause home prices to decline.

WATCH: New mortgage rules mean you might have to buy a smaller home

Click to play video: 'New mortgage rules means home buyers will qualify for smaller mortgage starting in January'
New mortgage rules means home buyers will qualify for smaller mortgage starting in January

Still, the breakdown of likely winners and losers looks a little different in a few local markets:

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Owners of detached homes in Vancouver, Toronto and surrounding areas: In the nation’s priciest markets of Vancouver and Toronto, the new mortgage rules are pushing more homebuyers toward less expensive properties. In Greater Vancouver, the benchmark prices of a detached home was up by around eight per cent compared to January 2017. That’s nothing to sneeze at, but it’s a far cry from the double-digit increases of the past. The rift between single homes and apartments is even starker in Toronto, where detached home prices fell nine per cent year over year.

Homebuyers in Ottawa and Montreal: The housing market may be cooling everywhere, but homebuyers in Ottawa and Montreal aren’t catching much of a break. Ottawa saw the sharpest sales decline in the country in January, but prices are still up seven per cent compared to a year ago, the biggest one-year jump since late 2010, BMO economist Robert Kavcic wrote in a research memo on Thursday. Price growth in Montreal “is not far behind at 5.2 per cent year over year, or a seven-year high for that city,” he noted.

READ MORE: Are home prices climbing out of reach in Ottawa and Montreal, too? 


Condo owners in Vancouver and Toronto: Condo prices in Greater Vancouver were up a mind-boggling 27 per cent in January year over year. In Toronto, prices climbed nearly 15 per cent year over year, in sharp contrast with the decline in single-family homes.

Homeowners in Ottawa and Montreal: Despite the new mortgage rules, homesellers in Ottawa and Montreal can count on roaring local economies and home prices that are still relatively affordable to keep attracting new buyers.

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