The real estate sector slowdown in Vancouver has spread on the Okanagan, although it is not trigger to panic, states an industry specialist.
Elton Ash, the regional executive vice president of RE/MAX of Western Canada, said community market watchers should look to notice condominium and also single family home prices fall in the entire year ahead, as much more balanced buying and marketing conditions take shape.
“Condos will not be as adversely affected as single detached houses will be. We’re taking a look at a 2 per cent (price drop) for condos and also for one detached home, we’re seeing a 3 per cent drop,” said Ash, incorporating the amount of product sales year-over-year has dropped by thirty three per cent in Kelowna.
At exactly the same period, the typical residential sale rates improved by 6 per cent year-over-year from $674,930 in 2017 to $718,915 in 2018, with rates likely to lessen by 3 per cent in 2019.
The changes in the marketplace stem from many factors.
Rising interest rates, government policy changes as well as the mortgage stress test all contributed to the drop, and that is likely to remain into 2019.
“The drop in sales in markets that are key across British Columbia is partly due to Canadians’ increasing issues in obtaining an inexpensive mortgage within the region,” said Ash. “The situation created by the launch of the mortgage stress test this season, and constantly increasing interest rates, means more Canadians is priced from the market.”
While upcoming price decreases might raise worries that a crash, the likes of that had been last seen in 2008, is on the way of its, Ash said that is not the situation.
“The last time was a natural oversupply of condominiums that developers designed with no resale, there’s also problem with individuals with walking away on debris and also that type of thing,” he said.
“In this particular instance tasks are going are through with presales….there is several oversupply, though it’s significantly less dramatic.”
In reality, Ash declared the changes looking this time around are in fact nutritious.
“Really this’s not terrible news,” said Ash. “This is a great news story. When you’re in a multiple offer scenario in a strong sellers industry it is difficult for everyone.”
Nationally, conditions are usually more powerful. Moderate cost increases are anticipated in 2019, as the RE/MAX 2019 Housing Market Outlook estimates the average sales price to improve by 1.7 per cent. Housing markets across the nation have stabilized in 2018, after the unprecedented increases in average sales price that lots of markets experienced in 2017.
Nevertheless, there still be a few outliers in 2018 average sales price gains, especially in places outside the primary city centres, like Chilliwack (+13 per cent), Windsor (+13 per cent), London (+17 per cent Charlottetown and) (+11 per cent).
A recently available survey discovered nearly one third (thirty one per cent) of Canadians said larger interest rates haven’t affected the power of theirs to pick up an inexpensive mortgage thus far. Nevertheless, this’s likely to replace in 2019.
A separate survey of RE/MAX brokers and agents found eighty three per cent predict rising interest rates will allow it to be harder for Canadians to buy a house following season.