Total sales in September across Greater Vancouver and the Fraser Valley were up almost 25% over September of 2016 and well above the 10-year average for the month. In both regions, townhouses and apartments posted the largest number of transactions. Prices for detached homes, across both regions, changed very little in the past month but prices for attached properties continued to rise. In the Fraser Valley, prices for townhouses increased 1.4% over August and prices for apartments increased 2.5%.
Strong sales should continue to the end of the year but may abruptly slow down in January. The Federal Government has just announced that the OSFI is setting a new minimum qualifying rate, or “stress test,” for uninsured mortgages (mortgages where borrowers have more than a 20% down payment), effective January 1, 2018.
- Guideline B-20 now requires the minimum qualifying rate for uninsured mortgages to be the greater of the five-year benchmark rate published by the Bank of Canada or the contractual mortgage rate +2%.
This change will mean many borrowers will qualify for a much lower amount than they would today.
Across the Fraser Valley, we are seeing an increase of inventory of attached properties yet prices continue to rise. The price increase for apartments has been dramatic. The Benchmark price for an apartment has increased 35.2% in the past 12 months. The Benchmark price for a townhouse has increased 17.7% in the past 12 months. The average days on market for an attached property was 19 days in September.
All areas continue to experience strong, sellers markets. Langley and Cloverdale remain the hottest areas.
Most areas in the Fraser Valley remain in sellers markets. South Surrey and Surrey have dropped into balanced markets however, within those regions remain some areas still experiencing sellers markets. The Benchmark price for detached homes has increased 11.2% in the past 12 months. The average days on market for a detached property was 29 days in September.
Surrey is a vast area. The areas of Guildford, Fleetwood, Fraser Heights, Bear Creek and Queen Mary remain in sellers markets. Generally, detached homes under $1M are in a sellers market.
South Surrey has some very pricey areas which is why the sales there have been slow. Detached homes under $1.5M remain in a sellers market with the King George Corridor being the most active.
Buyer Opportunities (Detached)
If you have been thinking about up-sizing to a detached home, this may be the right time. Prices for detached homes have stabilized and days on market have increased. Condo and townhouse owners can take advantage of the huge increase in value this past year and buy a home with a basement suite to offset the cost of their increased mortgage.
Panorama Ridge has lots of inventory and the area is currently experiencing a buyers market.
For investment purposes, focus on buying a home with a suite because so few people can afford to purchase a home without one.
Buyer Opportunities (Attached)
When buying a new or newer townhouse or condo, remember to research the developer and look closely at the finished product. Just because there is a home warranty on the building doesn’t mean the developer will happily take care of all the deficiencies. There are several strata corporations currently in court fighting to get the developer to pay for repairs.
Sometimes buying something 3 to 5 years old will give you a better idea of the quality of the construction and will save you a lot of money on the purchase price. A Depreciation Report will tell you the condition of the major components.
If you are thinking of selling, contact me for a free valuation of your home.