Amidst rising interest rates and record-breaking levels of inflation, the Fraser Valley housing market is starting to show signs of a correction.
In May, sales activity across all property types was down 16.9% compared to April, with single-family homes experiencing the most drastic dip at 21% compared to the month prior.
While sales have slumped, active listings in the area have more than tripled since December 2021. At the end of May, there were 6,183 active listings across the Fraser Valley, a 14.8% increase compared to the previous month.
Fraser Valley Real Estate Market Snapshot May 2022 (Fifth Avenue Real Estate Marketing Ltd.)
But is this market slowdown a cause for concern? According to Jamie Squires, real estate expert and President of Fifth Avenue Real Estate Marketing, homeowners don’t need to worry.
Squires has been monitoring and working in the Fraser Valley market for over 19 years. Based on what she’s observed, Squires believe these recent dips appear to be a market normalization rather than a full-on crash.
That’s because prior to this recent dip, sales activity and prices in the Fraser Valley were abnormally high.
Fraser Valley Real Estate Market Snapshot May 2022 (Fifth Avenue Real Estate Marketing Ltd.)
“What we’ve seen last year and in the first couple of months of 2022 was unprecedented,” explains Squires. “So if you weren’t comparing figures to a record-breaking year, the pace of sales last month would look normal.”
When it comes to average prices, Squires believes they’re likely to level off soon rather than drop further—especially for new builds, since there’s not much room for construction costs to go down given the rate of inflation.
Sales activity may stay slow for a few months, especially throughout the summer, as people are increasingly busy (and frequently away on vacation).
But it’s important to remember that real estate is generally a long-term investment that will experience occasional dips and slow downs.
Amidst a cooling market, homeowners haven’t actually lost any money unless they’re actively selling their property.
“Market trends have shown us that as long as you aren’t moving in the next six months, you’ll probably be back to where you were,” says Squires. “If you’re moving in five years, you’ll probably be up by the time you go to sell.”
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
