Insured Purchase/Transfer: Fixed 3.19% or ARM P-1.00%
Conventional ARM (up to 80%, 25 year am): ARM P – 0.45%
Conventional Special (up to 80%, 30 year am): Fixed 3.29%

The International Monetary Fund has expressed concern about rising risk in the Canadian housing market.

The IMF’s Global Financial Stability Report says that the risk has grown over the past two years and is near to levels seen during the financial crisis of the last decade.

However, there’s a major difference between then and now; the action taken by Canadian regulators to ensure that the financial system is robust and able to withstand another crisis.

While the B-20 mortgage guidelines – and the stress test in particular – has many critics, the IMF says that tougher mortgage policy and measures such as foreign buyers’ taxes, are the correct ones to protect the financial system from downside risks from the housing market.

Canada up, USA down
While Canada’s housing market has become riskier, the report says that the US risk is lower than it was due to declining levels of household debt and prices more in line with income.

But it says that Canadian markets have become riskier, especially Hamilton, Toronto, and Vancouver.

• Location: Drive ways of targeted residents: Bell Park, Amble Greene, Elgin Park, Chantrell Creek, Morgan Creek and Grandview Subdivisions.
• We advertise in local paper/social media/Craig’s List and Kijiji, www.WalkerRealEstate,ca/Blog, plus provide signage and area maps
• Details or sign up contact: Kimberly Walker 778.828.6186 or

kimberlywalker@dominionlending.ca (ensure you receive our confirmation)

• Final sign up date: April 18, 2019(include your name, address, and any big ticket items

SURREY, BC — Last month, buyers in the Fraser Valley took advantage of the continued stability in home prices and the highest inventory levels for March since 2015.

The Fraser Valley Real Estate Board processed 1,221 sales of all property types on its Multiple Listing Service® (MLS®) in March, a 24.3 per cent increase compared to sales in February 2019, and a 26.6 per cent decrease compared to the 1,664 sales in March of last year. Of the 1,221 total sales, 462 were residential detached homes, 300 were townhouses, and 346 were apartments. This was the lowest sales total for the Board during March since 2013.

Darin Germyn, President of the Board, said of the market: “From a buyer’s perspective, there are more opportunities available as we move deeper into spring. Many of our communities are seeing higher inventory levels, especially in the attached market with the number of available townhomes almost doubling and Fraser Valley condos more than doubling compared to last year.”

There were 7,011 active listings available in the Fraser Valley at the end of March, an increase of 9.4 per cent compared to February 2019’s inventory and an increase of 46.2 per cent year-over-year.

The Board received 2,872 new listings during the month, a 29.6 per cent increase compared to February 2019’s intake of 2,216 new listings and a 0.2 per cent increase compared year-over-year.

“One of the reasons our market has remained stable is simply due to affordability. Although prices have increased dramatically over the last ten years, during the last twelve months we’ve seen prices for all major residential property types in the Fraser Valley decrease between four and five per cent. This is good news for buyers,” continued Germyn.

For the Fraser Valley region, the average number of days to sell an apartment in March was 38, and 29 for townhomes. Single family detached homes remained on the market for an average of 38 days before selling.

HPI® Benchmark Price Activity

• Single Family Detached: At $963,100, the Benchmark price for a single family detached home in the Fraser Valley increased 0.4 per cent compared to February 2019 and decreased 4.2 per cent compared to March 2018.
• Townhomes: At $517,300, the Benchmark price for a townhome in the Fraser Valley in the Fraser Valley increased 0.3 per cent compared to February 2019 and decreased 4.5 per cent compared to March 2018.
• Apartments: At $418,000, the Benchmark price for apartments/condos in the Fraser Valley increased 2 per cent compared to February 2019 and decreased 5.1 per cent compared to March 2018.

The last three months of 2018 finally brought some improvement to housing affordability across Canada.

After more than three years of declining affordability, RBC Economics says its measure shows widespread improvement; although first-time buyers in the hottest markets are still facing a significant struggle.

In its Housing Trends and Economic Report, RBC’s aggregate housing affordability measure reduced by 0.7 percentage points to 51.9% last quarter (measured as a share of household income).

But in the three most expensive markets there is still a crisis with Toronto, Vancouver, and Victoria showing little improvement in affordability for most buyers.

Vancouver’s affordability crisis endures despite being in “full-blown correction mode. RBC says that even with the slump in sales, high prices means homeownership still requires an eyewatering 84.7% of household income.

Cooling market conditions in Toronto has taken a bite out of sales but RBC expects prices to be flat over the next two years; that won’t help the well-above-average affordability measure of 66.1%.

Montreal’s housing market is heating up but prices are rising at a steady pace.

The area’s affordability measure is some way below the two hottest markets and below the national average, but at 44.5% it is near a decade high.

Condos no longer the affordable alternative
The traditional option of a condo as a cheaper alternative to a single-family detached home is less attractive in the hottest cities.

RBC says that demand for condos has driven prices higher and their affordability measure has increased (become less affordable) by far more than single-family homes (2.9% vs. 0.9%) over the past year.

Buyers of an average condo in Vancouver, Toronto, Victoria, and Montreal pay a premium of more than $900 per month relative to renting a two-bedroom apartment, a figure that has ballooned in the past three years.

Buying a condo is a bigger step up from renting than it’s ever been in these cities.

Interest rate outlook
RBC Economics is not expecting rates to rise anytime soon but does forecast a continuation of the strong labour market, helping boost household income.

“We have lowered our profile for future interest rates in light of disappointing economic developments since the late stages of 2018,” said Craig Wright, Senior Vice-President and Chief Economist, RBC. “Furthermore, we also see very little scope for home prices to increase nationally this year.”

The current decline in the bonds market is good news for Canadian fixed-rate mortgage borrowers with rates heading lower.

As the bond market yields invert – as they did Monday in Canada – the cost to banks of borrowing in the market declines, meaning they are able to finance mortgages at a lower rate and pass savings on to customers.

It’s not all good news though because the inverted yield, also seen in US bonds, is often a foreteller of weakening economic conditions and potentially recession.

However, this risk is likely to mean that the BoC will remain highly cautious of increasing interest rates.

An outlook from TD Economics’ Beata Caranci and James Orlando suggests that Canada may need “the real interest rate to remain close to or below zero for a long period” with the deleveraging process only just starting.

There is a growing cohort of investors and analysts that believe the BoC’s next move on rates will be a cut and that is proving good news for variable rate mortgage borrowers too.

Janine White, vice-president of Ratesupermarket.ca told CBC News that rates will climb in the next couple of years but “for the rest of 2019 the prediction is that the variable rate is going to be stable and maybe has a chance of coming down.”

More industry bodies representing real estate agents have given their views on the federal government’s latest housing measures.

Reaction to the government’s budget measures remain mixed but the Canadian Real Estate Association, the British Columbia Real Estate Association and the Toronto Real Estate Board have all welcomed the focus on affordability for first-time buyers.

However, all have also reiterated their concern that the mortgage stress test provisions of the OSFI B-20 rules continue to weaken the ability of Canadians to buy homes.

“Millennials are passionate about owning their own home, but many are worried they will never be able to because of higher home prices and tougher mortgage qualifying rules,” said Barb Sukkau, CREA’s President. “Realtors have been advocating for the modernization of the HBP and are pleased to see it addressed in Budget 2019. The measures announced today will help today’s millennials in a tangible way, while also addressing some longer-term concerns related to housing supply and sustainability.”

Referring to the First-Time Buyer Incentive Program, BCREA CEO Darlene Hyde welcomed the introduction of shared equity mortgages and the increased limit for the Home Buyers’ Plan.

“British Columbians who aspire to home ownership need to be able to achieve this goal to assure a sustainable future for our province,” says Darlene Hyde, BCREA CEO. “Realtors have advocated for modernization of the HBP for a long time and we’re pleased to see it addressed in Budget 2019.”

Changes are needed
BCREA advocates a review of the mortgage stress tests in light of interest rate rises and is also calling for the reintroduction of CMHC-backed 30-year mortgages.

These views are shared by TREB CEO John DiMichele who says the restrictions on 30-year insured loans and stress tests are not warranted in current market conditions.

“This is especially true at a time when first-time buyers are facing serious challenges in achieving the dream of home ownership. We applaud the federal government for acknowledging that housing issues are a top priority for Canadians, but current mortgage restrictions still need to be addressed,” he said.

CREA says that it is encouraged that the federal government is carefully monitoring the effects of B-20 mortgage regulations with a view to limiting negative impacts on housing markets that are in balance or struggling, and on economic growth in Canada.

Conventional 5 Year Fixed Rate Special: 3.44% up to 30 years

Insured 5 Year Special: 3.34% and Prime -1.00%