The local Real Estate market is on a blistering pace and new changes coming to the Mortgage Stress test

“The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 5,708 in March 2021, a 126.1 per cent increase from the 2,524 sales recorded in March 2020, and a 53.2 per cent increase from the 3,727 homes sold in February 2021.” 

It’s not just a Vancouver thing.  Victoria, Whistler, Toronto, Calgary and more are all recording record increases in sales and home prices. 

“In March, residents bought and listed homes across our region at levels not seen before,” Taylor Biggar, REBGV Chair said. “This surge in activity is increasing upward pressure on prices. We’re beginning to see double-digit price gains for single-family homes and townhomes over the last 12 months.” 

These stats have gotten the attention of our Governments and economists.  The bank of Canada has recently issued a warning and has stated their concerns that Canadians may be taking on too much debt to buy Canadian real estate.  They are concerned about whether these price increases are sustainable.  However; these warnings are from Governments that have inflated debt to levels not ever seen before.  It’s hard to take it their concerns too serious, especially when the cost of construction of new homes is reaching record highs.  

Here in Southern BC, we have heard these concerns and warning many times in the past few decades.  The bottom line is that land, lumber and materials are all limited.  We live in one of the best places in the world and certainly the best place in Canada.  Basic economics of supply and demand would suggest you buy real estate sooner than later.   

Mortgage rates have risen from their record lows over the past few months.  They continue to be very attractive though.  A five year fixed can still be offered under 2% and variable rates near 1%.   Be cautious when it comes to mortgage rates.  As our economy rolls out of this pandemic, the mortgage rate may continue to rise further.  More importantly; The Office of the Superintendent of Financial Institutions is making a change to the stress test rate.  It means the rate used will be higher than the rate used currently making it harder to qualify for a prime rate mortgage.  This is to be effective as of June1, 2021.   Act now to refinance.   Send me an email if you have any questions or want to get a refinance started.