December 2019 - Latest Market Update

Vancouver Home Sales Rebound

Vancouver home sales appear to have turned a corner. Home sales last month in metro Vancouver jumped 55% compared to the same period last year pulling prices upwards. Improving market conditions has been the trend since the summer. This trend is predicted to continue into the New Year as inventory levels throughout the entire Lower Mainland shrink. It’s not just Vancouver experiencing strong sales. Canada’s largest city saw their housing prices rise at the fastest pace in the last two years. Although market conditions may have turned a corner, homeowners should not be surprised to see the assessed values of their homes fall from the previous year.

The Bank of Canada held their interest rate yet again last week and the rate has not changed for some time. It is the highest rate since December 2008. Many economists believe that the rate will likely drop in the New Year as economic growth will moderate especially given last month’s job report which seen a huge loss of over 71,000 jobs. This is the second month in a row of job losses and the unemployment rate has risen to 6%. The Bank of Canada will also be looking to replace the current Governor. Steve Poloz will be stepping down by the New Year and hopefully replaced with someone skilled in dealing with the new economic realities facing our country and the world.

Although fixed term mortgage rates have not changed much recently, they remain much lower than how they ended last year. High ratio (insured) mortgages offer a 5 year fixed as low at 2.49%. Uninsured mortgage rates are being offered between 2.69% and 3.09%.

Next year should be a very exciting time for both real estate and mortgage lending. “Don’t wait to buy real estate, buy real estate and wait.”

Happy Holidays and the absolute best of the new year to all my clients.

“The holiday season is a perfect time to reflect on our blessings and seek out ways to make life better for those around us.” Terri Marshall

October 2019 - Latest Market Update

Mortgage rates are down and the Real Estate market improves.

Mortgage rates have dropped 30% since the beginning of the year and this has made it much cheaper to own and qualify for prime rate mortgage.   The expectation is that rates should remain low and possibly drop lower before the end of the year if economic conditions do not improve.  Economic growth is constrained in most major economies of the world and there is a fear that another Global recession is on horizon.  The global trade issues and Brexit are some of the major culprits affecting growth.  The drop in rates so far have been restricted to the fixed rates but if a recession occurs the prime lending rate will also likely drop improving the cost of variable rate mortgages.   Currently 5 year fixed rates can be offered as low as 2.69% and variable rates as low as 2.95%.  Need a rate hold:  click here

The Real Estate market has also improved since the beginning of the year. “Home buyer demand has returned to more historically typical levels in Metro Vancouver over the last three months”. 

Some of the latest stats for September 2019 versus September 2018 are as follows:

• Sales were up 46%

• Detached sales were up 47% and the benchmark price was down 9%

• Condo sales were up 44% and the benchmark price was down 7%

• Number of homes listed for sale increased 3%

• Benchmark price for all residential homes is $991k (7% decrease)

The improved real estate stats are not reflective in the luxury market ($ 3 million plus) as the results for this segment are much more subdued.  Affordability continues to be the primary concern and the falling mortgage rates have certainly helped.  The new federal government’s first time home buyers program has also helped affordability in many Canadian markets but not for Metro Vancouver as the average prices of all types of homes here are well above the programs threshold.  Have questions about the Governments program:  click here

Did you know?

• The average population growth of Lower Mainland is near 2.5%.

• Langley, BC has the greatest numbers of realtors per capita : 1 realtor for every 6 people

• Halifax, NS has the least number of realtors per capita:  1 realtor for every 894 people

• Lions Bay, BC is exempt from the speculation tax

July 2019 - Latest Market Update

Mortgage rates are down and the local real estate market takes another hit.

We are passing the mid-point of the year most homeowners at this point are very aware of the down turn we are experiencing in the local real estate market.   Inventory has climbed and sales have fallen.   Property values are headed down and as much as some would call it a balanced market, it’s more of a buyers’ market.  Of course, there are few exceptions to this. Vancouver area homes sales posted their weakest June in almost twenty years. “We’re continuing to see an expectation gap between home buyers and sellers in Metro Vancouver,” said Ashley Smith, REBGV president. “Sellers are often trying to get yesterday’s values for their homes while buyers are taking a cautious, wait-and-see approach.”  To take a closer look at the stats, click here

Selling property in this market is challenging and requires a skillful realtor.   Hard work often pays off, but in these conditions; it’s more about price and affordability.  Buyers are taking advantage of these conditions and ‘low ball offers’ are becoming the norm.   Sellers should prepare themselves and understand that it will likely take additional time to sell their home.  When it comes to selling successfully there are few things that can help in delivering great results. Click here to ask me.

Mortgage lending conditions are not much better. The good news is that interest rates have fallen since the beginning of the year and 5 year fixed is now as low as 2.74%. Most economists think fixed rates should hold steady and that we should see the prime lending rate move lower later this year.  Borrowers looking to access these cheap rates should ensure they have all income taxes up to date and if you are self-employed ensure you have updated financial statements.   This will help get you the answer you need quickly.   Alternatively, if you need funds quickly and cannot meet the stringent lending criteria; then there are lots options but it comes at a higher cost. 

Mortgage rates: (certain conditions apply):

• Best 5 year fixed:  2.74% - insured

• Best 5 year fixed: 2.79% - uninsured

• Best Variable: Prime – 1%

• Best 10 year fixed: 3.44%

January 2019 - Latest Market Update

Bank of Canada Held Its Benchmark Interest Rate

Last week the Bank of Canada held its benchmark interest rate at 1.75% and the expectation is that we should not see many increases in the mortgage rates this year.  Some of the banks have already started to reduce their fixed rates this week.  The New Year has started with plenty of anxiety and predictions about real estate and mortgage lending.  Last year was a challenging period with the rise of interest rates, mortgage lending constraints and the introduction of many new taxes and policies on local real estate.  Our political landscape hasn’t helped drive much confidence either.   As are result Metro Vancouver home sales last year were the lowest annual total in the region since 2000.  This has led to a reduction of mortgage originations and a softening of home prices.  

It has been recently reported that over ¾ of our country’s wealth is represented by real estate.  Although a housing crash is not expected it does have many economists worried about the vulnerability of Canadians economic health.   In Vancouver alone, there has been over $60 billion drop in the net worth of home owners.

2018 seemed to have been the perfect storm against real estate but the prediction for this year is much rosier.  Interest rates are not expected to rise significantly and the inventory levels of homes listed for sale ended the year trending lower.  This should help stabilize prices. The Mortgage environment is starting to improve with new products and relaxing of lending criteria.   Buyers appear to be jumping of the fence and taking advantage of market conditions which for the most part is considered to be ‘balanced’.

Mortgage rates:

• Prime lending rate: 3.95%

• Five year fixed rates range from:  3.59% to 3.79%

• Five year variable rate range from:  3.10% to 3.70%

• Line of credit mortgage:  4.45%

October 25 2018 - Latest Update

Bank of Canada Increased Borrowing Costs Again

On Oct 24th and indicated that more increases are on the horizon.   Lenders immediately increased the prime rate to 3.95%. This is certainly not helping with mortgage qualifications nor housing affordability.   Market conditions have made many borrowers and home owners feel a bit uneasy and it’s warranted given the policies introduced by our Governments over the past few years in their effort to collapse real estate prices.  The latest stats on real estate reports that sales are falling dramatically and inventory levels are rising significantly.  Last month’s sales were 36% below the 10 year September sales average and the total number of properties currently for sale increased 38% compared to the same period last year.  

It is a great time for investors and first time home buyers to consider a purchase.   Many properties for sale across Lower Mainland have reduced prices and have been on the market for an extended period of time.  This positions a buyer to pick up a great deal.   Existing homeowners should review their financial position now before things deteriorate further.   It is a great time to consider refinancing to payout other debts and consider locking into a fixed rate term.   Most mortgage borrowers elect to lock into a 5 year fixed rate; however; other terms can be considered such as a 3 year fixed rate offered at 3.64%.

One of the best ways for variable rate mortgage holders to beat increasing interest rates is to pay their mortgage as if it was a fixed rate mortgage.  This will dramatically cut your interest costs over the mortgage term and its lifetime.  Many lenders are offering variables as low as 3.15%. 

Home owners considering selling their home should ensure they get the right advice and hire the right realtor.  Not all realtors are cut from the same cloth.  In my years as a realtor I’ve experienced many sloppy and reckless business practices.   Hard work, honesty and integrity should be the top criteria when selecting your listing agent.   Want to know more, click here.