This may be a surprise to some but the Canada real estate market begins to slow starting in October. In fact, it is a trend we see at this time every year.
This is nothing to be concerned about, sales drop off a little bit at the same time each year and typically, inventory drops as well.
The Good News about the Canada market
The good news story about 2017, from Q1 right through to Q3 has been an overall increase in sales activity from 2016. With the exception of the apartment sector, currently there is 8 months worth of supply on the market.
Which means there is an abundance of product currently listed.
Of course we know what the law of supply and demand dictates.
To learn more about the market, watch the video below and if you like, skip ahead to the points that interest you the most:
The BoC has increased their overnight rates by a quarter point or .25%.
As a result, all of the major lenders followed suit and increased their rates as well.
They have also tightened up the lending rules, one change has to do with people putting down 20% or more.
With 20% down, previous to August 1st 2017, you would have been able to qualify at the rate that the lender was offering you, let’s say that was 2.89%.
Now, the lenders require you to qualify at the Bank of Canada’s benchmark rate of 4.84%.
This is almost a 2% difference and drastically decreases your ability to purchase a home. (If you’d like more information on the effects of this, I suggest you reach out to one of our mortgage brokers at MortgageLine)
Both of these items can contribute to a slowdown in the market, particularly in those segments.
Higher interest rates will affect the entry level market where the rule change will affect the move up market.
Performance of Home Types
The apartment sector continues to get hammered as there is a massive oversupply in the market.
Non condo attached townhouse infills are outperforming their counterparts as there continues to be highs and lows in the attached condo market.
The bright shining star in all of this is that the detached market continues to be strong and stable.
So for sellers how does this matter to you?
Knowing that inventory is higher now, and sales activity has started its slow down for the year, it means a few things as buyers will have more time to make the selection because of less urgency in the market.
So if I was selling my home I would ensure all the little things are taken care of, don’t leave things undone, or incomplete.
Also – curb appeal is huge. With more on the market, and with the majority of places online using the front image of the home, make sure you are doing the little things to make your house stand out.
To watch the July Market report click play on the video below.