New mortgage rules still driving Fraser Valley home sales down: broker

Sales were down 24 per cent last month compared to this time last year

Real estate sales across the Fraser Valley were down a significant 24 per cent in March compared to a year ago, according to the latest numbers, but one real estate broker said there’s no need to panic.

“The 10-year average is 1,658 sales per month, and we processed 1,654 [this month],” said Michael Trites, managing broker with Royal LePage NorthStar in Surrey. “The sky isn’t falling.”

Referring to the latest numbers from the Fraser Valley Real Estate Board, Trites said the drop was nevertheless some cause for concern for those selling their homes, as they may need to drop their price for a more sluggish market.

“That will set a precedent for houses that are similar to it,” he said. “If your neighbour down the street sells for $1 million, you’re logically thinking that your house is worth a million. But if he has to take $950,000 for it, it’s not worth $1 million anymore.”

As for detached homes, Trites said sales were down pretty evenly across the region.

“White Rock is down 29.9 per cent, Langley is down 39.6 per cent, North Delta is down 30.0 per cent and Surrey is down 27.6 per cent.”

Even in the booming condo market, there’s a decline in sales from last year – 27.9% across the valley. “Last year was very much a strong banner year.”

Trites attributes the trend to the change in mortgage rules, known as the “stress test” that was implemented earlier this year.

All borrowers must now qualify for a mortgage based on either the five-year benchmark rate or their lender’s actual rate plus two per cent, whichever is higher. The change will apply to all mortgages, new or renewed, even if the down payment exceeds 20 per cent.

While there have been murmurs of how the province’s recently announced speculation tax, and newly expanded foreign buyer tax, will affect the housing market, Trites said it’s still too soon to feel the effects of that proposal.

Prices on Fraser Valley real estate, meanwhile, continued to rise in March.

The benchmark price of a single-family detached home went up 0.9 per cent compared to the previous month and 15.2 per cent compared to last year.

The benchmark price of a townhouse climbed two per cent compared to last month and 24.9 per cent compared to last year.

The benchmark price of a condo grew 4.3 per cent compared to last month and 48 per cent compared to last year.

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