The Canadian Real Estate board said that the Canadian average home price has dropped 10% over last year. Sales of homes also plunged by nearly a quarter from the same month last year.

The real estate group blamed recent mortgage rule changes for wreaking havoc on the market, creating feverish demand for starter homes, but making it much harder to move up.

CREA's chief economist Gregory Klump said in a news release, "Recent changes to mortgage regulations are fuelling demand for lower-priced homes while shrinking the pool of qualified buyers for higher-priced homes," 

"Given their limited supply, the shift of demand into lower price segments is causing those sale prices to climb. As a result, 'affordably priced' homes are becoming less affordable while mortgage financing for higher priced homes remains out of reach of many aspiring move-up homebuyers."

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