Although the U.S. is still struggling with an ailing housing market, its neighbors to the north seem to be recovering at a healthy rate. The Toronto real estate market looks especially vibrant despite an unpredictable first half of the year for both new starts and home re-sales. While the upward momentum for both sectors is beginning to slow down, an increase in new listings is helping balance the market and calming any concerns over the formation of a housing sector bubble.

The Canadian Real Estate Association (CREA) said the country will not see a housing price correction as dramatic as that of the U.S. because of Canada’s solid market trends. But because of the nationwide market cool-down, the CREA did recently cut back its 2010 forecast for resale home prices and sales. In addition, Canadian housing starts dropped 6.3 percent last month. Yet Toronto managed to stay afloat with a 0.9 percent increase in starts, thanks largely to a rise in condominium construction.

The figures are all over the board depending on the specific location, but Toronto condos generally appear to be selling at a considerably higher rate than detached houses. Surprisingly, the largest part of this market appears in the over C$500,000 bracket, while the former best sellers ran from C$300,000 to C$400,000. This phenomenon comes despite the changes in the federal insurance plan that went into effect on April 19. These new rules state that unless a buyer can prove an annual income of at least C$100,000 and can come up with a minimum down payment of 10 percent of the sales price, they will not qualify for a mortgage on a condo costing more than C$410,000 or a detached house selling for more than C$450,000.

This ruling aims to avoid the kind of foreclosure explosion the U.S. has faced and continues to struggle with. Buyers in Canada will not be able to purchase properties they are not able to carry the financing on. The new Canadian law is designed to prevent people from borrowing at low interest rates and later being faced with rising rates that they can’t afford, a situation that inevitably leads to default and foreclosure.

Despite the new restrictions, buyers and investors are still acquiring higher-priced properties in upscale neighborhoods. As noted earlier, the majority of these sales are luxury accommodations that top the half-million dollar mark. For example, sales of downtown condos were up by 37 percent while sales of the deluxe units on the Etobicoke waterfront were 24 percent higher than they were at the same time last year.

All in all, the Toronto housing market appears to be one of the few healthy entities left on the continent; according to experts in the field, it is thriving and vibrant despite the notorious collapse of the housing bubble in the rest of North America. Rising interest and mortgage rates are expected to curb market activity in the second half of the year; yet the new regulations may help young people resist the temptation of purchasing a residence before they’re solidly situated. Those who can afford to buy homes will be more likely to keep them, without fearing foreclosure.

Reproduction permitted only when all active hyperlinks are included. 2010 All Rights Reserved.

Stephen Daniels is an acclaimed NetBiz SEO 2.0 researcher. If you’re looking for an experienced Toronto real estate agent with a great track record to buy or sell your property, he recommends Ashley Fray. He was the leader in Toronto condo sales from 2007 to 2009 and is also a RE/MAX Platinum Award Winning Agent.