Areduction in house prices in Toronto, Canada’s largest housing market, has caused widespread concern among potential buyers. According to the Toronto Real Estate Board, house prices have dropped by approximately 19 per cent since peaking in April this year.
"This fall in prices has resulted in smaller loans being offered to prospective buyers, with many now looking to exit the deals. According to John Pasalis, President of Toronto real estate brokerage Realosophy, an estimated 5% of deals were at risk."
The cooling of the Toronto housing market has resulted from the Canadian government tightening lending rules, as well as Canada’s largest non-bank lender, Home Capital Group Inc., facing liquidity issues, which has caused the lending market as a whole to pull back from mortgage lending.