Mortgage "Stress Test" losing impact!

Posted on Sep 15, 2018

My opinion - Here is an article being circulated by Black Press which stems from the last BC Real Estate report from Cameron Muir.  It is a very general approach because it is stretching the data over the whole Province of BC.  However, in Chilliwack, a lot of the info does ring true.  We have not really dropped in prices but we have definitely stabilized.  We are now reaching a balanced market here in the Chilliwack Real Estate Market.  There are a lot of building lots and permits still yet to come out.  Inventory has increased.  Demand has mellowed somewhat but sales are still occurring consistently.  This gives Buyers some choice.  They don't have to make frantic, and often bad, decisions.  This is good news!   Sellers who price their homes effectively will sell.  Those that are still shooting for the stars will sit on the system a while longer until they correct their pricing.  It is important to position the home on the market effectively because it could be more financially painful when the market makes a shift downwards and you begin chasing the market downwards.  I personally don't see the market increasing until the next cycle so the next thing that usually happens is a dip in pricing.  We should plan and strategize accordingly.  Kelly Johnston - Select Real Estate

Mortgage stress test losing impact on B.C. housing sales: BCREA

Housing sales have been increasing each month since June across British Columbia cities
The impacts Canada’s mortgage stress test has had in calming the hot housing market by reducing demand are in the rear view mirror, according to the B.C. Real Estate Association.In its monthly report on August’s housing climate, it saw a 26 per cent decrease in housing sales from the same month last year. But seasonally adjusted, housing sales have been increasing by two to three percentage points since June.“The B.C. housing market is evolving along the same path blazed by Ontario and Alberta, where the initial shock of the mortgage stress-test is already dissipating, leading to increasing home sales,” said Cameron Muir, BCREA chief economist.
In its quarterly forecast in August, the association reported MLS residential sales are expected to be 21 per cent lower by the end of this year compared to 2017. That’s a drop from more than 100,000 sales to 82,000 in 2018.In that report, the BCREA placed blame for the sales decrease on the mortgage qualification stress that was introduced in January, which requires all mortgage applicants qualify for a mortgage at a higher rate than they will actually pay. The idea is to ensure the new home buyer can pay in anticipation of rising interest rates.Muir said static sales, as well as new home starts, have led to a more balanced supply in market conditions in many B.C. regions, compared to earlier this year. That means less competition and multiple offers that typically drive up prices.The average price for a home also edged back 1.2 per cent from the same time last year, at $669,776.

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