Finally, a good supply of properties in the market for Buyers to choose from, and, Buyers are facing less competition than they have in the past couple of years. This is a GREAT time to buy! Slow housing sales boosting supply: BCREA Overall housing market now balanced, but this varies between home types and areas, says BCREA By Glacier Media Real Estate | November 14, 2018, 12:56pm Shutterstock A slow October for residential real estate sales across the province has led to an overall balanced market and a “much-needed” increase in available homes for sale, according to the latest monthly statistics from the B.C. Real Estate Association. In total, 6,405 homes traded hands on the MLS last month, which is 26.2 per cent lower than October last year. However, that total is a jump of 14.9 per cent compared with the even slower month of September 2018, as the market picked up some fall activity. Of the 12 B.C. real estate boards, only B.C. Northern – which takes in the entire northern two-thirds of the province including Prince George and the booming Kitimat – posted a year-over-year increase in home sales last month. The BCREA said that average home sale price across the province in October was $690,161. That is a decline of 4.1 per cent from October 2017, but a slight month-over-month increase of 0.6 per cent, or $4,412. Only three boards reported an annual price decline, but as one of them was Greater Vancouver, that pulled down the provincial average sale price. The BCREA maintained its stance that mortgage “stress testing” introduced this year was to blame for the slowdown in housing demand. “The B.C. housing market continued to grapple with tougher mortgage qualifications in October,” said Cameron Muir, BCREA’s chief economist. “However, more moderate consumer demand has led to a much-needed increase in the supply of homes for sale.” The total number of homes listed for sale as of the end of October was up nearly 30 per cent year over year to 36,195 units. The BCREA’s report said, “While the B.C. housing market exhibited balanced conditions overall in October, market conditions do vary between regions and by product type.” The B.C. boards still in seller’s market territory (above 20 per cent sales-to-active-listings ratios) are Vancouver Island (30.9 per cent), Victoria (29.2 per cent), Powell River (27.7 per cent), B.C. Northern (22.5 per cent) and Kamloops (21.5 per cent). At the other end of the scale, the smaller regions of South Okanagan and Northern Lights are both in overall buyer’s markets. All the other B.C. regions, including Greater Vancouver and the Fraser Valley, are currently in balanced market conditions. However, even within those markets, conditions differ between home types – for example, detached houses in Greater Vancouver are in a buyer’s market while condos are bordering seller’s market conditions. Despite the overall market downturn, the BCREA has issued a series of optimistic sales forecasts asserting that the market will recover over the next six months. Glacier Media Real Esta
15-11-2018
Real Estate Market Update
A quiet rule change will make it tougher for Canadians with a HELOC to get a second mortgage ROBERT MCLISTER SPECIAL TO THE GLOBE AND MAIL PUBLISHED NOVEMBER 7, 2018UPDATED NOVEMBER 8, 2018 Got a home-equity line of credit (HELOC)? Want to get a new mortgage? Lenders are about to make your life harder. Canada’s No. 1 player in HELOCs, Toronto-Dominion Bank, just changed a key policy on Tuesday. For people applying for a separate new mortgage and keeping their existing HELOC, TD is requiring that applicants prove they can afford a theoretical monthly payment based on the limit – not the outstanding balance – of that HELOC. TD joins a small number of other lenders, including Royal Bank of Canada, in applying this new policy. It’s a stealth rule change if there ever was one. As of the time this is being written, the Office of the Superintendent of Financial Institutions (OSFI), Canada’s banking regulator, hasn’t explicitly claimed responsibility for it. Without a doubt, this could incrementally depress the cottage, second-home and rental markets. We’re not talking a market crash, here, but every credit-policy tightening adds up and weighs on home prices. Here’s who it affects If you are getting a new HELOC, all the banks will “stress test” you on the HELOC credit limit. In other words, they’ll add an assumed payment to your mortgage application, based on the greater of the government’s benchmark posted rate (5.34 per cent currently) or the lender’s contract rate plus two percentage points (around 6.45 per cent.) It’s worked like that for a while, so no change there. If you are merely renewing a mortgage, there is also no impact whatsoever. It’s those people who are getting an additional mortgage and keeping their existing HELOC who get hit. The impact For an average affected borrower with a $200,000 HELOC, suddenly they’ll have to prove they can afford a $1,202 HELOC payment (based on today’s rates). That could drive a typical borrower’s debt ratio above the typical lender’s maximum limits. Fortunately for many would-be borrowers, very few lenders have applied this policy – yet. By next year, however, I’d bet that all major banks will, as will scores of other lenders that get their funding from big banks. Hypocrisy, anyone? HELOCs have been growing like the cannabis market. Okay, maybe not that fast, but fast. But many borrowers never walk into a bank and ask for a HELOC. They are sold a HELOC. The Financial Consumer Agency of Canada (FCAC) says, “banks reported to FCAC that a readvanceable mortgage [a mortgage linked to a HELOC] is now the default option offered to credit-worthy mortgage customers with down payments of at least 20 per cent.” You see, HELOCs not only increase bank profits, they build fences around borrowers at renewal. That’s because borrowers must usually pay more to switch lenders if they have a “collateral charge” – another word for a HELOC. Lenders often try to approve borrowers for the maximum amount, says broker Shawn Stillman, of Mortgage Outlet. “Banks have been pushing HELOCs for years,” he says. (To be fair, a lot of brokers push HELOCs, too.) “It’s very hypocritical that banks have been promoting lines of credit and telling people, “Don’t worry, this big HELOC will never impact you. And now the banks are changing the rules of the game…" Better safe than sorry Regardless of what banks have been doing, they’re now doing the right thing, many argue. And OSFI would likely agree. On Tuesday, it said in an e-mail to me: “When underwriting any loan application where the borrower has an existing HELOC in place, FRFIs (federally regulated financial institutions) may use either the limit, or outstanding balance of the HELOC, to estimate an ‘assumed payment’ in calculating the Total Debt Service Ratio (TDSR) for this loan application. It is at their discretion, however OSFI expects that, given the revolving nature of a HELOC facility, FRFIs will take a longer term (and conservative) view of the borrower’s debt servicing requirements.” In announcing these changes in HELOC policy, TD says its “debt service ratio change was made to ensure prudent underwriting guidelines and reflects concerns around consumers’ abilities to manage debt – particularly in a fluctuating rate environment.” So, it’s understandable why this is happening, the fallout for those affected notwithstanding. There will be side effects. People with HELOCs who want to buy another property will have to:· Find a lender that doesn’t apply this policy (at a potentially higher interest rate); · Reduce their HELOC limit in order to pass the stress test; · Lock in their HELOC to a regular amortizing mortgage – not ideal if the borrower wants to pay off that debt without penalty and easily (and quickly) re-borrow for future needs; · Close their HELOC. If you’re thinking about getting a second property and want to retain your HELOC, act before year-end. But don’t get more financing than you can afford simply because of this new rule. Otherwise, you’ll be the person that regulators may be targeting with this policy. Robert McLister is a founder of RateSpy.com and intelliMortgage. You can follow him on Twitter at @RateSpy
09-11-2018
Credit
It is officially a Buyer's Market. If you are thinking of buying and you can qualify for a mortgage or have cash, this is your opportunity. We haven't seen a sluggish market like this since 2012. There are deals to be made. Call me. October 2018 Media Stats Package November 02, 2018 Home listings at four-year October high as sales remain below typical levels Home sale activity across Metro Vancouver* remained below long-term historical averages in October. The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 1,966 in October 2018, a 34.9 per cent decrease from the 3,022 sales recorded in October 2017, and a 23.3 per cent increase compared to September 2018 when 1,595 homes sold. Last month’s sales were 26.8 per cent below the 10-year October sales average. “The supply of homes for sale today is beginning to return to levels that we haven’t seen in our market in about four years,” Phil Moore, REBGV president said. “For home buyers, this means you have more selection to choose from. For sellers, it means your home may face more competition, from other listings, in the marketplace.” There were 4,873 detached, attached and apartment homes newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in October 2018. This represents a 7.4 per cent increase compared to the 4,539 homes listed in October 2017 and a 7.7 per cent decrease compared to September 2018 when 5,279 homes were listed. The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 12,984, a 42.1 per cent increase compared to October 2017 (9,137) and a 0.8 per cent decrease compared to September 2018 (13,084). For all property types, the sales-to-active listings ratio for October 2018 is 15.1 per cent. By property type, the ratio is 10.3 per cent for detached homes, 17.3 per cent for townhomes, and 20.6 per cent for condominiums. Generally, analysts say that downward pressure on home prices occurs when the ratio dips below the 12 per cent mark for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months. “Home prices have edged down between three and five per cent, depending on housing type, in our region since June,” said Moore. “This is providing a little relief for those looking to buy compared to the all-time highs we’ve experienced over the last year.” The MLS® Home Price Index composite benchmark price for all residential homes in Metro Vancouver is currently $1,062,100. This represents a one per cent increase over October 2017 and a 3.3 per cent decrease over the last three months. Sales of detached homes in October 2018 reached 637, a 32.2 per cent decrease from the 940 detached sales recorded in October 2017. The benchmark price for detached properties is $1,524,000. This represents a 5.1 per cent decrease from October 2017 and a 3.9 per cent decrease over the last three months. Sales of apartments reached 985 in October 2018, a 35.7 per cent decrease compared to the 1,532 sales in October 2017. The benchmark price of an apartment property is $683,500. This represents a 5.8 per cent increase from October 2017 and a 3.1 per cent decrease over the last three months. Attached homes sales in October 2018 totalled 344, a 37.5 per cent decrease compared to the 550 sales in October 2017. The benchmark price of an attached home is $829,200. This represents a 4.4 per cent increase from October 2017 and a 2.8 per cent decrease over the last three months. *Editor’s Note: Areas covered by the Real Estate Board of Greater Vancouver include: Whistler, Sunshine Coast, Squamish, West Vancouver, North Vancouver, Vancouver, Burnaby, New Westminster, Richmond, Port Moody, Port Coquitlam, Coquitlam, Pitt Meadows, Maple Ridge, and South Delta. The real estate industry is a key economic driver in British Columbia. In 2017, 35,993 homes changed ownership in the Board’s area, generating $2.4 billion in economic spin-off activity and an estimated 17,600 jobs. The total dollar value of residential sales transacted through the MLS® system in Greater Vancouver totalled $37 billion in 2017.
05-11-2018
Real Estate Market Update