Vancouver’s home sales have dropped more than 30% from last September to this September. In essence, the asking price for houses hasn’t really gone up, but the mortgage has. The government has “recently eliminated the availability of a 30-year amortization on government-insured mortgages,” thus decreasing demand cause some potential buyers cannot afford it now.
Is this really worth all that money? Are you willing to pay a expensive mortgage for this?
One way to tell the increasing price of housing is the percentage increase in listings from last year to this year, a 14% increase. As Sal Guatieri of BMO Nesbitt Burns says, sales will continue to drop as buyers seek revenge after the decade-long boom of the 2000s.
However, where exactly is Canada’s housing market going? With the inevitable sliding of Vancouver’s market and the increase in Calgary (climbed 14.4% from September of last year). As well, what will happen to the condo situation in Toronto, they can’t just keep producing and selling, it has to stop at one point.
I think we must appreciate Jim Flaherty’s management of the situation, his recent tightening of mortgage regulations have decreased risk of a crash and will likely result in a progressive decrease in sales. His intention was set on high-end home buyers, particularly in Toronto, to reconsider before jumping into the market in order to avoid a future crash in the market.
As for Vancouverites, we’ll just keep our dead money in our houses! Or sell them and profit.