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Surrey, BC) – Property sales through the Fraser Valley Real Estate Board’s Multiple Listing Service® (MLS®) decreased by 19 per cent in November compared to the same month last year, moving from 1,120 to 905. Sales also decreased 14 per cent month-over-month compared to October 2012.

Scott Olson, president of the Board says, “Buyers can’t borrow as much as what they could prior to the mortgage rule changes, so we’re seeing our pool of prospective buyers shrink and we’re seeing a change in the price range they’re looking for.

“For three months in a row, we’ve seen a decrease in sales of detached homes $700,000 and up and greater demand for those $400,000 to half a million. Tighter credit conditions are having an impact on the market.”

In addition to the drop in sales in November, the number of new listings posted on the MLS® decreased by 11 per cent compared to last year and by 32 per cent compared to October. Olson observes, “This was a significant drop with last month ranking alongside November 2003 as the slowest for new listings in the last decade.

“It means that sellers are adjusting to conditions that favour buyers; great selection, houses are on the market longer and prices are lowering. If sellers don’t have to sell, they’re taking their home off the market.”

In the last six months, prices for all three residential property types combined have decreased by 1.4 per cent while year over year they’ve increased by 1.3 per cent. For single family detached homes, the benchmark price increased by 2 per cent in one year, going from $533,800 in November 2011 to $544,700 last month.

For townhouses, the benchmark price in November was $298,900, a decrease of 1.5 per cent compared to $303,600 during the same month last year. The benchmark price of apartments in Fraser Valley in November was $202,800, an increase of 2.6 per cent compared to $197,700 in November 2011.

The Board received 1,723 new listings in November compared to 1,926 during the same month last year, taking the number of active listings to 9,478, on par with November 2011.

For a detached home in the Fraser Valley, the average number of days to sell in November was 59, up five days from the same month last year. For townhomes, it was 70 days and apartments 74 compared to 52 and 72 in November 2011.

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News release from Scotia Macloud 


Lower-for-longer interest rates

 

Canadian economic growth has shown most of its weakness concentrated in trade. Housing market sales and price gains in 2012 have been modest, but positive. Constraints on economic growth continue as the markets currently focus on the resolution of the fiscal cliff - however, the global financial markets will just have to navigate through these risks. Consequently, the lower-for-longer interest rate environment will likely continue, while we expect moderate economic growth to support commodities and equities.

Tighter mortgage rules

The withdrawal of monetary stimulus is expected to begin around mid-2013. This will be gradual and administered in phases. More stringent mortgage rules and tighter mortgage underwriting rules have recently slowed down the housing market. Even with tighter mortgage rules, the low interest rate situation could still bring demand for homes in the market, causing home prices to trail upwards - at least until interest rates rise in late-2013. Under the condition that economic growth continues, the Bank of Canada stated that the next shift for interest rates in Canada will be upward.

Housing market impact

All regions of the housing market are expected to be affected from the macroeconomic trends and regulatory progression. This means those who will be impacted will depend primarily on location. While regulation is having the intended impact on the housing market, this is only temporary. The slow down we are experiencing is expected to be lifted in early-2013.  

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