Real Estate Update - Mortgage Rates Are Rising

Over the last few weeks mortgage lenders have increased fixed term rates by up to 35 basis points and the indications are that further increases will be coming soon.  The increase in mortgage rates along with the recent tightening of the mortgage lending rules could result in worsening home affordability.  Not only is it now harder to obtain a mortgage approval it will soon cost you more every month.  A low rate of 2.49% can still be obtained for a five year fixed term and variables rates can still be offered as low of 2.20%.  Don’t expect these rates to last.  I encourage mortgage borrowers to review their financial position and take action to refinance before it becomes even more difficult.   

Need a rate of up to 120 days,  click here. 

Home prices moderate

Residential home sales for the month of November have decreased nearly 40% versus the same period last year and are almost 10% below the ten year average.   It’s not all bad news as the downward pressure is primarily on detached properties.  Sales for apartments actually increased in November over the previous month.   Demand for apartment and townhomes are higher than detached properties and as a result detached home prices have weakened while attached home prices have remained stable.  The softening of the detached prices may begin to stabilize as the inventory levels begin to decrease.  A strong marketing strategy and execution is now more important than ever when it comes to selling your home.   

For the full real estate report, please click here.

Real Estate Lending Update October 2016

Mortgage lending will never be the same    

Last week our Finance Minister introduced new mortgage lending rules for mortgages offered from insured lenders.   To name only a few:  First National, MCap and Merix financial are the type of lenders affected.  One of the new rules particularly impacts the qualifying rate used to obtain an approval.   Borrowers will now need to qualify using a published rate which is much higher than the contract rate.  Another change reduces the maximum amortization from thirty to twenty-five years.  The bottom line:  as of Oct 17th it will be much more difficult to obtain a mortgage likely resulting in higher mortgage rates, less product options and competition.  First time home buyers will be further constrained and some real estate markets will be damaged.   I personally fail to see how these new regulations are in the public’s best interest but I encourage all mortgage borrowers to review their financial position and act to refinance/renew sooner than later.  Rates remain very low with the best 5 year fixed at 2.29% and best variable at 2.20%.  

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Easing the upward pressure on home prices

Real Estate has also been a target with many new Provincial Government regulations introduced over the past few months along with the Federal Government as of recently and unless it’s just coincidence, it seems to be having an impact.  The number of sales has declined over the past few months down twenty to forty percent depending on the type of property.  At the same time inventory levels have increased in many regions particularly with detached homes.  These current conditions are making it easier to help people buy.   I’m not confident that these conditions will last long but the new mortgage rules announced last week may also have a negative impact on market conditions; but it is too soon to tell.  

For the full real estate report, please contact us.

 

Real Estate Update Vancouver

Mortgage rates have not made recent headline news but they have been creeping downwards unnoticed. The five year fixed rate can now be offered as low as 2.30% and variable rates are even lower. Most nations in the world are concerned about sustaining economic growth and as countries introduce new stimulus policies to help grow their economy, rates should continue to edge lower. The US could be the exception, but many economists don’t anticipate any major changes there either. 

Real Estate especially here in Vancouver and Toronto has made plenty of headline news.  Many of us are now aware that BC has introduced two new taxes to help with what they considered a Housing crisis.On top of this mortgage lending practices are being further scrutinized which will likely result in tougher lending qualifications.  It’s anyone’s guess of what the long term effect will be on real estate prices but what I do know is that we can help make your real estate transaction easier and cheaper. 

The high real estate values and low rates have made it much easier for clients to reduce their borrowing costs.  Saving money can be as easy as getting a second opinion on your mortgage renewal. 

Click here to check out our new listing - 303 1230 HAMILTON STREET

Vancouver Housing & Afforadability

Lately it seems that all the news is about housing and affordability and there’s a good reason. The benchmark price for detached properties increased 37 per cent from May 2015 to over $1.5 million and the number of sale transactions hit a new record for the month. Our Federal finance minister, our Premier and Vancouver’s Mayor have recently all expressed deep concern and have promised more action to cool our Real Estate market.   This could result in a disaster for real estate especially if macro-economic factors change at the same time our Governments introduce tightening policies.  I don’t believe this will happen anytime soon; but it’s prudent to be cautious.

Home owners are encouraged to ensure their financial house is in order by reviewing your mortgage and other debt obligations.  The rapid rise in home values is making it much easier for borrowers to consolidate and improve their cash flow.  Home owners considering selling should do so while we remain in a ‘sellers’ market.  Anyone considering a home purchase should do so within their affordability and not overleverage themselves.

Mortgage rates remain at near-record-lows and there are signs that fixed and variable rates may drop lower over the next few months.  Take action now while conditions are great.  Here are a few options that can help with affordability:

• Variable rate mortgage offering rates as low as 2.25%.
• Longer term amortizations of up to 35 years.
• Line of Credit mortgages offering interest only payments.
• Mortgages that combine the best of a Variable rate and a Line of Credit.

This is not the first time the Vancouver area has experienced a sizzling market; many of us have seen it before and although many property owners have reaped the rewards, others have not been so lucky.  Help is a click away….

 

Mortgage rates continue to remain stable with only modest downward pressure.

The Canadian economy appears to be in a neutral position with little inflationary pressure and as a result

interest rates are expected to remain low. This is good news for helping with housing affordability. Monthly payments for $100,000 borrowed can be as low as $275. Our high home values are helping many of us reduce our borrowing costs or to expand our real holdings. Many attractive refinance solutions are available but self-employed borrowers continue to face difficulty in qualifying for the low rates. Usually this is caused by not declaring taxable income and no matter how financially prudent it is to minimize taxes; the consequence can be higher borrowing rates.

It’s hard to imagine real estate prices rising any higher but the MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver increased 25.3% compared to April last year. Inventory levels continue to support a ‘sellers’ market and many buyers are finding it very difficult to purchase often losing to multiple offers. Did you know: One of the best ways to help qualify for financing of a detached home is with a rental suite(s). Some lenders allow up to 70% offset which has a huge impact in helping to qualify.

All of our agents are dually licensed realtors and mortgage brokers. We make all your real estate needs easier and more convenient.

Interest rates that matter:

• Best 5 year fixed – 2.39%
• Best Variable – 2.25%
• Line of Credit – 3.30%
• Prime – 2.70%

 

Metro Vancouver home sales set record for February The sales in February were 56.3 per cent above the 10-year sales average for the month.

By JOANNE LEE-YOUNG, Vancouver Sun March 2, 2016

Last month was the highest selling February on record for the Metro Vancouver housing market, according to the Real Estate Board of Vancouver.
Photograph by: Jason Payne , PNG

METRO VANCOUVER — Last month was the highest selling February on record for the Metro Vancouver housing market, according to the Real Estate Board of Vancouver.

Residential property sales in the region, which covers areas from Whistler to South Delta, totalled 4,172 in February 2016, up 36.3 per cent from a year ago.

The sales in February were 56.3 per cent above the 10-year sales average for the month and rank as the highest February sales total on record.

“We’re in a competitive, fast-moving market cycle that favours home sellers,” Darcy McLeod, REBGV president said. “Sustained home buyer competition is keeping upward pressure on home prices across the region.”

New listings for detached, attached and apartment properties in Metro Vancouver totalled 5,812 in February 2016. This represents an increase of 7.1 per cent compared to the 5,425 units listed in February 2015 and is up 30.8 per cent compared to January 2016 when 4,442 properties were listed.

“We’re beginning to see home listings increase as we head toward the spring market; however, additional supply is still needed to meet today’s demand,” McLeod said.

The total number of properties currently listed for sale on the Multiple Listing Service system in Metro Vancouver is 7,299, a 38.7 per cent drop compared to a year ago. The sales-to-active listings ratio in February 2016 was 57.2 per cent. The REGBV said: “Generally, analysts say that downward pressure on home prices occurs when the ratio dips below the 12 per cent mark, while home prices often experience upward pressure when it reaches the 20 to 22 per cent range in a particular community for a sustained period of time.”

The Fraser Valley Real Estate Board also reported sizzling February numbers with 2,387 sales, up 79 per cent compared to a year ago. This is 46 per cent over the 10-year average for the month of February and four per cent higher than the previous record of 1,948 sales in February 1992.

“In my twenty-five years of real estate, I have never seen such consistent demand for housing in the Fraser Valley,” said Charles Wiebe, president of the FVREB. The board said across Fraser Valley, the the average number of days to sell a single family detached home in February 2016 was 21 days, compared to 41 days in February 2015.

Tight Metro Vancouver markets push average house price to new record $1.83 million

By Derrick Penner, Vancouver Sun February 2, 2016

The average price for a detached home in Metro Vancouver soared to a new record of $1.83 million in January in a market that continues to see hot demand, but a now shrinking supply of homes for sale.

METRO VANCOUVER – Home sales in January eased off December’s torrid pace around Metro Vancouver, but remain in high gear with buyers piling into markets marked by a shrinking inventory. That has kept pressure on prices to reach sharply higher, the latest report from the Real Estate Board of Greater Vancouver shows.

The average price for detached homes across the region hit a new record high of $1.83 million in January, a full 40 per cent higher than January 2015.

The board recorded 2,519 sales through the multiple listing service in January, down 11 per cent from December’s 2,827 sales, but still 32 per cent higher than the level of sales in January a year ago.

However, inventory, also shrank, with new listings down 6.2 per cent at 4,442 in January compared with a year ago and a total inventory of 6,635 homes for sale, down 38 per cent, which really kept pressure on pricing.

“Home buyer demand is at near record heights and home seller supply is as low as we’ve seen it in many years,” said Darcy McLeod, president of the Real Estate Board of Vancouver in a news release.

The board’s benchmark measures strip out luxury sales to track prices of homes more typically sold and in January, the benchmark for detached homes was up 28 per cent to $1.29 million in January on sales of 1,047 homes.

Condo sales were slightly hotter at 1,096 units, a 35-per-cent increase from a year ago, but the benchmark price was up less so, 19 per cent, to hit $466,600.

Townhome sales were up 16 per cent in January compared with a year ago, but that only represented 376 units. The results did push the benchmark price on townhomes up, also by 16 per cent, to $563,700.

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