Sales of Canadian homes rose 2.2 percent in December from November, regaining some of the momentum after tighter mortgage rules sideswiped sales in November, a report from the Canadian Real Estate Association showed on Monday.

The industry group said actual sales, not seasonally adjusted, were down 5.0 percent from December last year, while home prices were up 14.2 percent from a year ago, according to the group’s home price index.

CREA said December’s rebound recovered less than half of the drop in November, when sales posted their biggest monthly decline in more than four years after tighter mortgage rules came into effect.

Canada has repeatedly reined in mortgage lending in a bid to cool hot housing markets. While most markets have cooled, double-digit price gains in Toronto have helped buoy the national market.

CREA said 2017 resale activity should be lower than 2016, given the tighter mortgage regulations.

“Home sales are unlikely to benefit the Canadian economy as much in 2017 as they did in 2016,” Gregory Klump, CREA’s chief economist, said in the report.

“New regulations mean that in order to qualify for a mortgage, home buyers will either have to save longer for a bigger down payment or purchase a lower priced home. In urban centers where the latter are in short supply, that’s likely to translate into fewer sales,” Klump added.

The December report showed sales activity was up in about 60 percent of all local markets in the month, led by Calgary and Edmonton. The two cities in Canada’s energy patch have rallied after large declines in November but are well off their housing peaks amid a two-year slump in oil prices.

Prices hit new record highs in Victoria and the Greater Toronto Area, CREA said. The two cities have seen demand rise in the months since a 15 percent foreign buyers tax was levied in Vancouver in August. The tax was imposed after local residents complained that wealthy foreigners, mostly from mainland China, were driving prices out of reach.

Tight supply continues to make it a seller’s market, the report showed. The number of newly listed homes fell 3.0 percent in December from November, driving the sales-to-new listings ratio to 63.5 percent. A ratio between 40 and 60 percent is considered a balanced market.

The number of months of inventory fell to 4.6 percent from 4.8 percent in the previous month, CREA said.

As published by Thomson Reuters