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Two constants remain the same, sellers who price their homes well, will likely benefit from an active
market, and buyers who wait too long to decide may lose opportunities!
New Mortgage Rules Change Real Estate Landscape?
The new rules for mortgage qualification were implemented October 17th, 2016. The
ripple effect in the mortgage community was quick: many think these new rules are
going to be a game changer because borrowers will be forced to qualify at the posted
rate for a 5 year mortgage, specifically 4.64% when the discounted rate actually used
is more than 2% lower.
This new buyer "stress test", as the federal Finance Ministry is calling it, will affect
many buyers who are forced to purchase at the top of their affordability range.
According to The Globe and Mail (Oct 7/16), if a family income is currently $80,000
and they were pre-approved for $500,000 purchase, then under the new rules these
buyers would now qualify for a $400,000 purchase. This is with 5% down payment,
2.49% interest rate and a 5 year term for their mortgage. Essentially this is a 20%
drop in buying power.
Is this going to slow our markets down? Are sellers faced with following buyers downmarket to get a sale? To quote a client's recent remarks "Rob, I have been to this
rodeo before". In a nutshell, if the rates stay low alongside low inventories, I believe
the local real estate market will stay buoyant for the foreseeable future. We have
weathered changes in the past and I am no longer surprised at how people find a way
to own a home.
What we may experience in the next 60 to 90 days is the typical Christmas slowdown.
When the 15% foreign tax was introduced in Greater Vancouver, it coincided with the
seasonal mid-summer slowdown, thus compounding, at least in the eyes of the
media, the effect of the new tax. If we experience a slowdown mortgage rules will be a
factor but the winter will be the primary reason. The real measuring stick will be the
Spring, 2017 market: if inventories stay low, the local market will be busy; if the rule
changes are effective, inventories will grow (more supply), buyer choices will broaden
(softening demand) and prices will begin to decline.
Tightened mortgage rules are one of many changes in lending guidelines over the last
several years designed to slow the torrid real estate market. A very similar claw back
was implemented around 4 or 5 years ago when the 3 year posted rate was used to
qualify buyers, on both high ratio (less than 20% down payment) and conventional
mortgages. We watched amortizations get scratched back from 40 years, to 35 to 30
and now they are 25 year terms maximum for most first time buyers with high ratio
mortgages; the average price over this period since 2008 has increased from
$353,707 (monthly average Sept, 2008, VIREB) by 34.8%. In fairness, Canadian
fiscal policy contributed to our country avoiding the property crash our American
neighbours sustained over the last decade.
Read the rest of the blog post here!
I have witnessed many business, regulatory, economic, and social changes which
affect our industry. I feel this latest iteration will slow us down in the short term but
buyers will regroup, re-evaluate, and ready themselves again for home ownership.
If you are ready to sell and wish to meet to discuss market conditions
simply click on the "sell now" button. Above all, our
team will ensure your buy and sell experience runs
smoothly.
Rob
Visit Our Website!
FULL MARKET STATS HERE
free market
evaluation
38 HALIBURTON STREET
A traditional plan with two bedrooms on the main
level, living room with wood burning fireplace, two
bedrooms up plus a one bedroom suite
downstairs Many updates are offered including
electrical, plumbing, renovated main bathroom and
a new roof in 2014.
FULL HOUSE STATS HERE
#202-55 DAWES STREET
This 895sf two bedroom strata home has an open
plan including a very large living room, dining area,
galley kitchen, and glass doors onto the cozy front
deck. Two bedrooms plus a remodeled bathroom
with tiled surround shower/jetted soaker tub, and
classy sink and faucet are notable.
FULL HOUSE STATS HERE
Exclusive listing: 6453 TALUSWOOD PL
New to the market, this stunning home will not last
long. Located in North Nanaimo off Dover Rd, you
are in close
proximity to schools, shopping & professional
offices.
FIND ALL THE DETAILS HERE!
NELSON RIDGE ESTATES
The Maurelle - Only 6 Homes left - move in Feb
2017. Check out this fabulous living space...
Open floor plan
Peninsula kitchen overlooking the dining
area
2 bedrooms and 2 bedrooms and den floor
plans with 2 bathrooms
6 appliances and all window coverings
FIND ALL THE DETAILS HERE!
HOW TO TAKE ADVANTAGE OF A SELLER'S MARKET
A seller's market is indeed a fabulous time to sell. Not
only will your days on market be remarkably fewer in
a sellers's market, but you might receive multiple
offers, which could drive up the sales price.
But is not as easy as sticking a sign in the yard and
letting the market take care of the rest.
FULL TIPS HERE
CHEER UP YOUR ENTRYWAY!
Pressed for time but want a big show? Fit an
assortment of evergreen branches into a
decorative planter, and fill in around the edges
with spray-painted magnolia branches and sprigs
of seeded eucalyptus. There are so many ideas
designed to come together quickly and easy to
tailor to your home.
THE FULL LIST OF IDEAS HERE
The RE/MAX Miracle Home Program allows our team the opportunity
to make a donation to Children's Miracle Network from each
transaction we complete. The Rob Grey Team believes in the
difference we make when we help others in our community benefits
us all. More info on Miracle Home Program here!
Rob Grey | 5140 Metral Dr., Nanaimo, BC | 250-713-3322 | [email protected] | robgrey.com
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