Marcus Arkan, CTO of Syndicate Mortgages, has recently reviewed the current statistics from housing markets across Canada and presented a detailed analysis of the chilling Vancouver market. According to Mr. Arkan, Vancouver can be considered one of the markets most severely affected by the rule changes introduced by Mr. Flaherty earlier this year. In contrast, figures from the Canadian Real Estate Association, as reported by the Wall Street Journal, show that home prices have elevated in two of the other major metropolitans, Calgary and Toronto.
According to CREA, the average home price in Vancouver has dropped 11% from April 2011 when the prices peaked at $815,252. Currently, the average home price in Vancouver was recorded to be around $372,544. At this point, Vancouver still remains one of the most expensive metropolitans. However, Mr. Arkan states that dropping sales may change the situation sooner than expected.
“Vancouver has remained one of the most livable cities for a long time. Home starts and sales were high and so were the prices. It was one of the hottest markets in North America, fueled by immigrants and overseas investors. Things are changing dramatically now. The booming market might hit the brakes now,” Mr. Arkan added.
Decline in sale prices is largely due to a significant drop in home sales said Mr. Arkan. According to CREA’s stats, there has been a 33% drop from this time a year ago. Meanwhile, the Vancouver Real Estate Board reveals that the number of listings in metropolitan has increased 14% in September from a year ago.
Mr. Arkan said that the cool down of the Vancouver market is rather good news given the current economic situation. “Sales and demands have remained continuously high for several months in Vancouver, and during the peak, buyers had to pay several thousand extra dollars to seal the deal on their desired property. The market was overheating to a dangerous extent,” said Mr. Arkan.
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Explaining some of the reasons behind the slowdown, Mr. Arkan said that recent policy changes regarding immigrants as well as homebuyers have played a major role in taming the prices and sales in the region. Earlier this year, Finance Minister Jim Flaherty announced tighter mortgage rules that created affordability issues specifically in areas where prices were already steep.
On the other hand, two immigrant programs, including the Immigrant Investor Program, were temporarily frozen by the Immigration Minister. While the freeze ends in January next year, Mr. Arkan is of the opinion that overseas investors and immigrants will wait for the next year’s rules before investing again.
About Syndicate Mortgages Inc.
Syndicate Mortgages Inc. is one of the leading Canadian mortgage brokerage firms. Founded in 2008 in Ontario, the company specializes in residential, commercial and construction financing across Canada. With years of experience and expertise in the mortgage industry, and access to an array of lending institutions across Canada, Syndicate is known for finding the best mortgage rates for their customers. Syndicate has branch locations across Canada. For contact, please use the following details.