CREA Updates Resale Housing Forecast. Click on the link for more information.

 

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December 18, 2012


8 major changes that impacted Vancouver Real Estate 2012.

 

1. Mortgage rule changes. Mr. Flaherty and the federal government introduce a further stiffening of amortization, qualification, and refinancing rules, in particular for insured mortgages (less than 20% down). General consensus from experts is that this has at least somewhat contributed to the current slowdown in the national market and significantly so in Vancouver and Toronto.

2. Low rates. How long will the rates stay low? Economic conditions south of the border and abroad continue to influence and solidify predictions that current ultra-low borrowing costs will continue for at least a year or two more. A concern here is that despite the borrowing rule changes, buyers will continue budgeting based on today’s rates rather than average historical rates that are bound to return at some point in the next few years.

3. Volume down.  In Vancouver in particular, the slowdown in number of sales has been dramatic, 30% in many niches.

4. Prices down....? Despite the huge drop in volume, prices have not dropped as much as would be expected. Sellers appear confident that demand will return. However, some niches have dropped 10-15% at this point, there’s cracks in a few other niches, and who knows what 2013 will produce.

5. Sellers to Buyers market. Buyers have been waiting a loooong time for the shoe to be on the other foot and after sitting back for much of 2013 and hoping for a larger collapse in the market, seem to be feeling like some of the modest price corrections they’ve seen are now good  enough to start to feel opportunistic.  This is likely to result in a renewal of activity in the spring but at a more modest level than before the correction and with conservative pricing.

6.Depreciation Report program for strata.  This is a big one. By introducing new budgeting regulations that will coerce most, and eventually likely all, stratas to run their building finances and maintenance programs in a far more businesslike, transparent and pro-active manner, the government has taken a big step in better protecting strata home owners. Frankly, it’s about time.

7. Foreign buyers.  Currently, there’s less of these, particularly from mainland China. However, where they come from is changing, as international attraction to Canada’s financial and asset security continues to grow.

8. Immigration rules. A slight stiffening of language proficiency rules, a streamlining and re-focussing of skilled immigrant rules, and a tightening of purchasing/ownership rules will demand more of a commitment from foreign purchasers of Canadian property. This will have some sort of impact, but opinions are widely varied on what this will be.

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