Tighter Regulation Trims Home Sales
Vancouver, BC – October 15, 2012. The British Columbia Real Estate Association (BCREA) reports that the dollar volume of homes sold through the Multiple Listing Service® (MLS®) in BC declined 28.5 per cent to $2.2 billion in September compared to the same month last year. A total of 4,539 MLS® residential unit sales were recorded over the same period, down 24.3 per cent from September 2011. The average MLS® residential price was $494,213, down 5.6 per cent from a year ago.
"Stricter high-ratio mortgage regulation further exacerbated a moderating trend in consumer demand,” said Cameron Muir, BCREA Chief Economist. “Reducing the maximum amortization from 30 to 25 years had the equivalent impact to affordability as a 100 basis point increase in mortgage interest rates."
“An expanding population, strong full-time employment growth and persistent low mortgage interest rates are expected to bolster housing demand in the months ahead,” added Muir.
Year-to-date, BC residential sales dollar volume declined 18.5 per cent to $28.4 billion, compared to the same period last year. Residential unit sales declined 10.6 per cent to 54,670 units, while the average MLS® residential price was 8.9 per cent lower at $519,289.
The above press release from the BCREA does actually have some promising news as it shows that the decline in sales is a reflection of the change in the mortgage rules as this equates to a rise in interest rates - no surprise that an increase in monthly payments have caused a decline in the number of sales! However, the good news is the prediction that housing demand will increase in the months ahead. The stats above are for the whole of BC and here in Nanaimo although we have seen a decrease in sales the average price for a single family home has generally been fairly balanced when averaged over the year for 2010 and 2011.