If you bought a home few years ago, you know you made a good decision. If that home happened to be a townhome, pat yourself on the back one more time.
Even though there has been an across-the-board increase in prices, townhome prices went up a whopping 45 per cent in 2017 compared to 2016.
Detached homes, meanwhile, grew by 25 per cent compared over the year.
Local realtor Ihor Zalubniak believes the strong townhome market drives from an enthusiastic buyer who wants to continue to live in Squamish, but may not have been able to afford a detached home.
“High prices, new tax announcements, rising interest rates, and stricter mortgage requirements are among the factors affecting home buyer and seller activity today.” Phil Moore, REBGV president
The townhome market, he believes, will remain strong. Zalubniak says the heat of the last year’s market has subsided, but there will be a modest increase in asking prices. Squamish, he says, generally lags the Vancouver market by 60 days in terms of activity.
“I have seen a number of homes in the last 4-6 months that were listed on the projection curve of the very rapid increases we say in 2016 and early 2017. As the sales tapered off in the late summer and early fall, the pricing flattened, thus we see longer listings, price reductions and many fewer sales above or at asking price,” he said.
Meanwhile the new stress tests and mortgage rules seem to be having the impact the government desired, if the stats from the Real Estate Board of Greater Vancouver are anything to go by.
Take February of this year. Metro Vancouver homes sales dipped below the long-term historical average. The residential property sales registered a 9 per cent decrease in February this year, compared to February 2017.
If you look at property type, the detached home sales were down 39.4 per cent, although apartment sales grew by over five per cent, the real estate board reported.
Skip forward to April, and see the same pattern repeats itself. The March stats from REBGV show that residential home sales saw a 29. 7 per cent decrease from 2017, and home sales were 23 per cent below the 10-year March sales average.
“We saw less demand from buyers and fewer homes listed for sale in our region in the first quarter of the year,” Phil Moore, REBGV president said. “High prices, new tax announcements, rising interest rates, and stricter mortgage requirements are among the factors affecting home buyer and seller activity today.”
In a report analysing the new stress test, TD Canada Economists Beata Caranci and economist Diana Petramala estimate the new rule will depress demand and shave off anywhere from two to four per cent of the average price level.
But that dip in sales, though expected, will be temporary, some experts say.
Tom Davidoff is a professor of real estate at the Sauder School of Business. He says even though the stress tests can limit credit availability for people looking to buy, it’s difficult to forecast prices because the new rules exempt local credit unions and many borrowers got pre-approved last year as the changes were announced.
Cameron Muir of BC real estate association says the BC’s strong economy, a steady arrival of new immigrants and lack of supply will eventually revive the real estate market.
Peter Legere says
The average cost for a 1 bedroom apartment in Squamish is $450 grand. You need $1800/month just to pay the mortgage. This is not sustainable.