The number of new mortgages insured by the Canada Mortgage and Housing Corp. dropped by more than a third in the three months ending in September, another sign that Canada’s housing market is facing a downturn.

CMHC’s third-quarter results showed the volume of newly-bought homes insured by the government-run agency fell more than 37 per cent from the same period a year earlier, to 91,000 from approximately 145,000 in the same period a year earlier.

CMHC spokesperson Charles Sauriol said the agency is attributing the decline to the new mortgage rules put in place by Finance Minister Jim Flaherty in June. That echoes the assertions of many organizations in the real estate industry, including the Canadian Real Estate Association.

The degree to which the new rules are responsible for the housing slowdown is a matter of controversy. Evidence suggests weakness in the Toronto and Vancouver markets began before the new rules were announced.

The CMHC report notes that “the specific impacts of these changes are difficult to isolate from more general economic and housing market trends.”

CMHC insures “high-ratio” mortgages, meaning those mortgages where buyers put down less than 20 per cent of the value of the house as a down payment.

But while fewer people are taking on new mortgages, the numbers indicate those who do have mortgages are holding up well, financially. The percentage of CMHC-insured mortgages that were in arrears in the third quarter of 2012 was 0.34 per cent, slightly better than the 0.42 per cent recorded in the same period of 2011.

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  • Calgary: 3-bedroom house

    <strong>$1.08 million:</strong> Located in the trendy Altadore neighbourhood of Calgary, this as-yet-unbuilt modernist house features views of the downtown core as well as a personal elevator. Source: Keller Williams Realty

  • Calgary: 3-bedroom house

    <strong>$1.08 million:</strong> Located in the trendy Altadore neighbourhood of Calgary, this as-yet-unbuilt modernist house features views of the downtown core as well as a personal elevator. Source: Keller Williams Realty

  • Calgary: 3-bedroom house

    <strong>$1.08 million:</strong> Located in the trendy Altadore neighbourhood of Calgary, this as-yet-unbuilt modernist house features views of the downtown core as well as a personal elevator. Source: Keller Williams Realty

  • Toronto: 1-bedroom condo

    <strong>$988,000:</strong> Located in the posh Residences of the Ritz Carlton, in the heart of Toronto, this condo features one of only a handful of private terraces in the entire building. Source: Sotheby's International

  • Toronto: 1-bedroom condo

    <strong>$988,000:</strong> Located in the posh Residences of the Ritz Carlton, in the heart of Toronto, this condo features one of only a handful of private terraces in the entire building. Source: Sotheby's International

  • Toronto: 1-bedroom condo

    <strong>$988,000:</strong> Located in the posh Residences of the Ritz Carlton, in the heart of Toronto, this condo features one of only a handful of private terraces in the entire building. Source: Sotheby's International

  • Montreal: 4-bedroom rowhouse

    <strong>$998,000:</strong> This historic townhouse in the wealthy enclave of Westmount is "of historic interest," according to the realtor, and features its original glass doors and marble panels at the entrance. Source: Sotheby's International

  • Montreal: 4-bedroom rowhouse

    <strong>$998,000:</strong> This historic townhouse in the wealthy enclave of Westmount is "of historic interest," according to the realtor, and features its original glass doors and marble panels at the entrance. Source: Sotheby's International

  • Montreal: 4-bedroom rowhouse

    <strong>$998,000:</strong> This historic townhouse in the wealthy enclave of Westmount is "of historic interest," according to the realtor, and features its original glass doors and marble panels at the entrance. Source: Sotheby's International

  • West Vancouver: 1-bedroom condo

    <strong>$985,000:</strong> The real estate agent boasts that this property offers a "spectacular 180 degree view of the city, Lions Gate Bridge, Stanley Park, Kitsilano, Point Grey and beyond to Vancouver Island." Source: Angell Hasman Realty

  • West Vancouver: 1-bedroom condo

    <strong>$985,000:</strong> The real estate agent boasts that this property offers a "spectacular 180 degree view of the city, Lions Gate Bridge, Stanley Park, Kitsilano, Point Grey and beyond to Vancouver Island." Source: Angell Hasman Realty

  • West Vancouver: 1-bedroom condo

    <strong>$985,000:</strong> The real estate agent boasts that this property offers a "spectacular 180 degree view of the city, Lions Gate Bridge, Stanley Park, Kitsilano, Point Grey and beyond to Vancouver Island." Source: Angell Hasman Realty

  • Charlottetown, P.E.I.: 8-bedroom house

    <strong>$998,700:</strong> This historic property was once the Edenhurst Inn and is now on sale as a private residence. "No expense was spared in the construction of this home using sycamore and oak for interior finishing," the realtor says. Source: Re/Max Charlottetown

  • Charlottetown, P.E.I.: 8-bedroom house

    <strong>$998,700:</strong> This historic property was once the Edenhurst Inn and is now on sale as a private residence. "No expense was spared in the construction of this home using sycamore and oak for interior finishing," the realtor says. Source: Re/Max Charlottetown

  • Charlottetown, P.E.I.: 8-bedroom house

    <strong>$998,700:</strong> This historic property was once the Edenhurst Inn and is now on sale as a private residence. "No expense was spared in the construction of this home using sycamore and oak for interior finishing," the realtor says. Source: Re/Max Charlottetown

  • Winnipeg: 4-bedroom house

    <strong>$989,900:</strong> This modernist mansion from custom home designers Artista Homes features three fireplaces, including a three-sided one, and ensuite bathrooms with heated floors. Source: Royal LePage Alliance

  • Winnipeg: 4-bedroom house

    <strong>$989,900:</strong> This modernist mansion from custom home designers Artista Homes features three fireplaces, including a three-sided one, and ensuite bathrooms with heated floors. Source: Royal LePage Alliance

  • Kamloops, B.C.: 2-bedroom ranch house

    <strong>$960,000:</strong> This ranch house inspired by the "pueblo" style of the U.S. southwest is located in one of the few places in Canada that look like the southwest U.S. — the B.C. interior. The house features foot-thick concrete walls, and is set into the hillside to look half-buried. Source: Royal LePage Kamloops

  • Kamloops, B.C.: 2-bedroom ranch house

    <strong>$960,000:</strong> This ranch house inspired by the "pueblo" style of the U.S. southwest is located in one of the few places in Canada that look like the southwest U.S. — the B.C. interior. The house features foot-thick concrete walls, and is set into the hillside to look half-buried. Source: Royal LePage Kamloops

  • Kamloops, B.C.: 2-bedroom ranch house

    <strong>$960,000:</strong> This ranch house inspired by the "pueblo" style of the U.S. southwest is located in one of the few places in Canada that look like the southwest U.S. — the B.C. interior. The house features foot-thick concrete walls, and is set into the hillside to look half-buried. Source: Royal LePage Kamloops

  • Montreal: 5-bedroom townhouse

    <strong>$985,000:</strong> The realtor humbly describes this property as a "cottage in Westmount," but with five bedrooms, four baths and parking for two, this "cottage" is pretty out-sized. Source: Profusion Realty

  • Montreal: 5-bedroom townhouse

    <strong>$985,000:</strong> The realtor humbly describes this property as a "cottage in Westmount," but with five bedrooms, four baths and parking for two, this "cottage" is pretty out-sized. Source: Profusion Realty

  • Montreal: 5-bedroom townhouse

    <strong>$985,000:</strong> The realtor humbly describes this property as a "cottage in Westmount," but with five bedrooms, four baths and parking for two, this "cottage" is pretty out-sized. Source: Profusion Realty

  • Toronto: 4-bedroom bungalow

    <strong>$989,000:</strong> Located in an area with lots of surrounding commercial properties, the seller notes that the zoning could easily be changed to allow for a business. But you can always just live in this property, if paying $1 million for a bungalow strikes you as reasonable. Source: Realty Way Corporation

  • Saskatoon: 3-bedroom house

    <strong>$970,000:</strong> Don't let your eyes deceive you: This isn't a historic property. Rather, this duplex is a recreation of the Todd House, a 19th-century home located in Toronto. It's so modern it even features an indoor garage. Source: Hallmark Realty

  • Saskatoon: 3-bedroom house

    <strong>$970,000:</strong> Don't let your eyes deceive you: This isn't a historic property. Rather, this duplex is a recreation of the Todd House, a 19th-century home located in Toronto. It's so modern it even features an indoor garage. Source: Hallmark Realty

  • Saskatoon: 3-bedroom house

    <strong>$970,000:</strong> Don't let your eyes deceive you: This isn't a historic property. Rather, this duplex is a recreation of the Todd House, a 19th-century home located in Toronto. It's so modern it even features an indoor garage. Source: Hallmark Realty

  • Port Medway, N.S.: 3-bedroom seaside estate

    <strong>$990,000:</strong> Originally meant to be occupied by the architect who designed this property, this property on Nova Scotia's South Shore is "designed to be self-sustaining," the realtor says, and was built partly using reclaimed and re-purposed materials. Source: Tradewinds Realty

  • Port Medway, N.S.: 3-bedroom seaside estate

    <strong>$990,000:</strong> Originally meant to be occupied by the architect who designed this property, this property on Nova Scotia's South Shore is "designed to be self-sustaining," the realtor says, and was built partly using reclaimed and re-purposed materials. Source: Tradewinds Realty

  • Port Medway, N.S.: 3-bedroom seaside estate

    <strong>$990,000:</strong> Originally meant to be occupied by the architect who designed this property, this property on Nova Scotia's South Shore is "designed to be self-sustaining," the realtor says, and was built partly using reclaimed and re-purposed materials. Source: Tradewinds Realty

  • An actual house in Vancouver!

    It may be a shock to some, but yes, it is possible to buy an actual house — not a condo — for under a million in Vancouver. Here's proof: A two-bedroom property in the city's desirable Kitsilano neighbourhood, for a mere <strong>$998,800!</strong> Source: Sutton Group - West Coast

  • An actual house in Vancouver!

    It may be a shock to some, but yes, it is possible to buy an actual house — not a condo — for under a million in Vancouver. Here's proof: A two-bedroom property in the city's desirable Kitsilano neighbourhood, for a mere <strong>$998,800!</strong> Source: Sutton Group - West Coast

  • An actual house in Vancouver!

    It may be a shock to some, but yes, it is possible to buy an actual house — not a condo — for under a million in Vancouver. Here's proof: A two-bedroom property in the city's desirable Kitsilano neighbourhood, for a mere <strong>$998,800!</strong> Source: Sutton Group - West Coast