By Gagandeep Ghuman
Published: June 17, 2018
The red hot real estate market is cooling down in Squamish–and faster than the province.
Changes in mortgage rules introduced by the Bank of Canada and interest rate increases seem to be having a cooling effect on the local real estate market. Home prices, however, don’t seem to show a downward slide.
According to a latest report by BCREA, home sales fell by 28.7 per cent across the province in May compared to the same month last year.
In Squamish detaches home sales fell by 59.5 per cent in May compared to the same month last year, while condo and townhomes prices fell by 21.9 per cent and 37.5 per cent this May compared to the same month last year.
There doesn’t seem to be any effect on prices, however, which still seemed to be on a growth path, at least when compared for the month of May in the last two years.
That is not the case in BC, where prices were down 1.7 per cent from May 2017.
BCREA chief economist Cameron Muir said home sales continue to slow in May because of more stringent qualifications for conventional borrowers.
“The changes in mortgage policy are taking their toll on housing demand, not only in British Columbia, but across the country by reducing household purchasing power and housing affordability,” he said.
The decline in consumer demand has led to an increase in inventory, active listings are still relatively low by historical comparison, he added.
Local realtor Ihor Zalubniak said he expects that demand for townhouses under $1 million will potentially increase as buyers locked out of the housing market will turn their attention to townhomes.
Keep you eyes on Valleycliffe, Northyards and Dentville, he says.
It was the same story all over Canada, with mortgage borrowing falling by $2 billon, the lowest since the second quarter of 2014. Once again, this change was due to the introduction of new mortgage stress test and rising interest rates, according to figures reported by Stats Canada.
Tighter mortgage rules and interest rates have tempered home price growth, including in Toronto and Vancouver, according to a poll conducted by Reuters.