Steam and validating

13 Aug

By Katia Dmitrieva Broker John Pasalis knew Canada’s hottest housing market was cooling but an email from desperate sellers showed him just how bad it was.

A young couple had been looking to cash in on their three-bedroom home in a Toronto suburb after prices rose 25 per cent in April from the prior year.

and as policy makers look to rein in runaway prices and risk.

Then last week the regulator said it’s considering requiring lenders to stress test uninsured mortgages, which is expected to cool things further.They soon found first-time buyers who agreed to pay 0,000 and, assured of the deal, the couple bought another larger home further away from the city.But the market began to turn just before the closing date in June, and the buyers reneged on the deal, forfeiting their ,000 deposit.A rate increase from the central bank may price people out of the property market but it’s not necessarily a bad thing, said Craig Wright, chief economist at RBC Capital Markets.A debt-to-income ratio hovering near a record “suggests the economy and consumer sector is more sensitive to smaller increases in interest rates than we’ve seen in the past,” he said.