The federal government decision to step in with tighter mortgage rule changes may increasingly rest on the performance of one market now raising alarm bells.
BC’s skyrocketing home sales may be good for brokers in and around Vancouver but bad for everyone else, with new numbers for the province making a good case for tighter mortgage rules.
"BC home sales climbed significantly in March," Cameron Muir, BCREA chief economist wrote in an official release Thursday. "More homes traded hands last month than any March since 2007. On a seasonally adjusted basis, March posted the most home sales of any month since December of 2009."
A total of 9,101 residential unit sales were recorded in March, a 37.6 per cent year-over-year increase.
Prices, meanwhile, shot up 14.1 per cent to an average of $641,799 year-over-year.
"Rock bottom interest rates and rising consumer confidence have strengthened housing markets in most regions of the province,” Muir said. "Many board areas are now exhibiting sellers' market conditions with home prices advancing well above the overall rate of inflation."
Meanwhile, the IMF chimed in once again on the state of the housing market, expressing concern about record-low interest rates – which are being credited for pushing sales in British Columbia.
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“If interest rates rose or there was a slump in employment many borrowers might not be able to make mortgage payments,” the IMF stated in its World Economic Outlook. “The government has already taken some steps to make qualification for mortgages a bit stronger. Other policies to dampen demand may be required.”
The Bank of Canada also noted strong sales and price growth in Vancouver as well as Toronto, both sharing the title of “Canada’s hottest housing market.”
“To date, the impacts on housing activity from falling energy prices appear to be largely restricted to Canada’s energy-producing regions,” the Central Bank said Wednesday. “The previously robust markets of Calgary and Edmonton have seen steep declines in resale activity and a significant slowdown in the year-over-year growth of house prices in recent months.”
That slowdown may be the only thing forcing the federal finance minister to hold off on further tightening of mortgage rules for buyers, fearful such a move would idle the national economy.
"BC home sales climbed significantly in March," Cameron Muir, BCREA chief economist wrote in an official release Thursday. "More homes traded hands last month than any March since 2007. On a seasonally adjusted basis, March posted the most home sales of any month since December of 2009."
A total of 9,101 residential unit sales were recorded in March, a 37.6 per cent year-over-year increase.
Prices, meanwhile, shot up 14.1 per cent to an average of $641,799 year-over-year.
"Rock bottom interest rates and rising consumer confidence have strengthened housing markets in most regions of the province,” Muir said. "Many board areas are now exhibiting sellers' market conditions with home prices advancing well above the overall rate of inflation."
Meanwhile, the IMF chimed in once again on the state of the housing market, expressing concern about record-low interest rates – which are being credited for pushing sales in British Columbia.
#pb#
“If interest rates rose or there was a slump in employment many borrowers might not be able to make mortgage payments,” the IMF stated in its World Economic Outlook. “The government has already taken some steps to make qualification for mortgages a bit stronger. Other policies to dampen demand may be required.”
The Bank of Canada also noted strong sales and price growth in Vancouver as well as Toronto, both sharing the title of “Canada’s hottest housing market.”
“To date, the impacts on housing activity from falling energy prices appear to be largely restricted to Canada’s energy-producing regions,” the Central Bank said Wednesday. “The previously robust markets of Calgary and Edmonton have seen steep declines in resale activity and a significant slowdown in the year-over-year growth of house prices in recent months.”
That slowdown may be the only thing forcing the federal finance minister to hold off on further tightening of mortgage rules for buyers, fearful such a move would idle the national economy.
