The mortgage news of the day today is that the Canadian housing market has cooled down considerably the past couple months compared to this time last year. The Canadian Real Estate Association has reported that housing sales are down 45% in Vancouver this year compared to July of 2009. Prices have also dropped since April, now being down 2.8 percent.
All in all, it is not surprising to me, having heard word from realtors and other mortgage brokers who have seen a decrease in business, and I have stated many times to people that there will be a market adjustment whenever there is a major change to mortgage lending rules. Additionally, the change in BC to the HST will also have scared some buyers off temporarily, and that has come into effect on July 1.
Rates are still low, and with lower prices, it appears to be a great time to buy and be able to get a property that you really like, which is difficult in times where the housing market is hot. Additionally, it is my belief that it is a really good time to move up in the market.
The housing market right now is similar in nature to the autumn of 2008, where mortgage lending rule changes were a factor in the decrease in home sales. At that time, there was also the US housing crisis to consider. July is also generally considered a quiet time of year and the market was already adjusting to the mortgage changes (the same mortgage changes that caused a sales spike in April as people hurried to buy before the rule changes came in) when it got hit by the perception of the HST making housing a lot more expensive.
Historically, people are busy enjoying their vacations in the summer, and get back to the business of buying homes in September. It is my belief that this is when the market will adjust back to a more balanced market, and when there will be a lot more competition again, and prices should remain stable or rise at that time. It is a good time to pick a place in August. Real estate is generally a long term investment that appreciates over time, and I do not believe that will change anytime soon.
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