Robert Valeriote 604.880.1300

Newsletter E-market update

November 07, 2017

November Newsletter

Mortgage rule changes coming…what does that mean?

It appears that Canada’s banking regulator has decided to go after the “average” Canadian homebuyer after slowing down our “high-end” market last year with the foreign buyer’s tax. Even homebuyers who don’t require mortgage insurance because they have more than a 20% down payment will have to show they can support the payments if interest rates rise. Local buyers with good household income to qualify will be impacted the most. From January 1st, every mortgage amount will have to be qualified based on 2% above what the buyer is approved for. This means that the mortgage amount you can receive will be about 18% less than what you can get today. Those who are putting down less than 20% (high ratio / CMHC insured) are already being qualified at the higher rate. So, there is no further impact on them. Up to January 1st the old rules apply. if your mortgage is approved by the you are golden.

Our government’s objective is to slow down the housing market and ensure long term stability. The implication is that buyers with exactly the same income as before will be qualified for less starting next year. Hence, property prices are expected to be forced (ideally) to adjust downward. We’ll likely start to see the impact next spring and will know by the end of next year if their objective was met. Once again, Vancouver’s housing market resiliency will be tested.

In October our market conditions continued to vary based on property type. Listings of detached homes rose in September, so the detached home market is well supplied which is relieving pressure on prices. It is a much different story with townhomes and condos which have limited supply and are seeing upward pressure on prices. Sales of detached homes in Metro Vancouver did rise last month by 44.2% over last October as buyers are taking advantage the large number of homes on the market. Sales of townhomes also rose by 33.5 % over a year ago and the number of condo sales was up 30.1% over last October.

As a side note, we see the media talking about the number of foreign buyers returning to our market. While this is true, it should be noted that many of them are buying pre-sale condos which are exempt from the foreign buyer’s tax. Still a good sign that they continue to invest in our real estate market.

I offer:

  • Over 20 years of experience in your market area.
  • Professional and honest expertise.
  • A full service and extensive marketing plan to maximize the sale price of your home.

Robert Valeriote
when it is time to sell…call me first!!!

Robert Valeriote, Vancouver Condo

View the current Vancouver Condo Real Estate Listings

 

This communication is not intended to cause or induce a breach of any existing agency agreement.


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