By Caroline Van Hasselt

Reuters

Economists and analysts have debated whether the government went too far in tightening mortgage rules last year. Particularly vulnerable, observers said, was the market for Canada’s most expensive homes.

The Canadian government last summer limited the availability of government-backed insurance to houses valued under one million Canadian dollars ($948,700.) That effectively required buyers of more expensive homes to pay at least a 20% down payment. Many expected that to cool demand for pricey houses.

Real data for this segment is scarce. Real-estate agents, meanwhile, can be an optimistic bunch when it comes to their industry. But Canada Real Time talked to four high-end brokers to get a sense of what the year’s been like. All said that government action hasn’t weakened the market all that much.

“I’ve seen a very slight effect,” said Jonathan Ferrier, a Toronto realtor with Royal LePage Real Estate Services Ltd.

“Compared to a year ago, it’s steady,” said Christian Vermast, a sales agent at Sotheby’s International Realty Canada.

Weather has played a much bigger factor, agents say. A cold, snowy winter and late spring resulted in “miserable” sales, but activity has picked up sharply since May, said Mr. Vermast. “The up to C$2.5-million market has been extremely active,” he said.

Since May, a total of 300 properties in the C$1-million-to-C$2.5-million range have come up on the market in Toronto, said Mr. Vermast. And about 100 houses listed between C$1 million and C$1.35 million since May have sold over their asking price, with an average list-to-sale price ratio of 101%, he said.

A two-a-half-storey house in Toronto’s trendy and historic Cabbagetown, listed at C$1.395 million, sold for C$1.5 million in one day, according to Toronto’s Multiple Listing Service.

A lot of interest is still coming from foreign buyers, especially from the U.S., Iran, Russia and China, said Sotheby’s agent Fran Bennett. And a lot of Canadian expatriates are returning from the U.S. and England to raise their children here. Most of the interest Sotheby’s is seeing is from people in the finance industry or entrepreneurs, she said.

As for the C$5-million-plus range, Mr. Vermast said there’s been a “huge, huge uptick” in interest from Asian buyers.

Brian Torry, manager and broker at Bosley Real Estate Ltd. in midtown Toronto, said sales activity for freehold homes listed between $750,000 to $1.2 million in the city core has been very active.

“Good listings are selling very quickly if you’re in a good neighborhood,” he said.