The number of apartments changing hands last month was virtually the same as July 2017 (100 compared to 101) Housing demand in the VIREB area has shifted lower so far in 2018, likely due to stricter mortgage qualification rules (Guideline B-20) for conventional borrowers and rising interest rates that are taking their toll on household purchasing power and affordability. However, because many of our buyers are retirees, who do not typically need mortgages, the VIREB market has been somewhat sheltered from the effects of Guideline B-20.
The federal government’s mortgage stress test was expanded in January in a bid to protect homeowners from becoming overextended, particularly in Vancouver, which has the highest average home prices in Canada. Yet the latest data on mortgage defaults shows that Vancouver homeowners have the lowest delinquency rate in the country at 0.08 per cent, one of the tiniest ever recorded.
In its 2018 Second-Quarter Housing Forecast, the British Columbia Real Estate Association (BCREA) anticipates that MLS® residential sales in the province will decline by nine per cent to 94,200 units this year from 103,700 in 2017. “B.C. housing markets have benefited from the provincial economy expanding well above trend growth over the past four years,” says BCREA chief economist Cameron Muir. “But economic growth is expected to slow and reflect the long-term average this year.” On a local level, BCREA predicts that over the next several months, VIREB’s long-term sellers’ market will begin shifting towards a more balanced one. In fact, an interesting development in the VIREB area is that the market seems to be splitting into two in some communities: one that favours sellers for homes $600,000 and under, and a buyers’ market for more expensive properties.
The benchmark price of a single-family home in the VIREB area reached $510,700 in July, a 12 per cent increase from one year ago. Nanaimo’s benchmark price was $534,300, the same as June but a nine per cent increase from one year ago.
For a more specific market overview please contact Derek or stop by our office.