New Mortgage Lending Rules Triggers Seller’s Market for Vancouver Townhouses and Condos
Prices for condos in Vancouver Proper just reached a benchmark price of $655,400. Couple that with the strict new mortgage rules that set a new qualifying rate for uninsured mortgages (in addition to a 20% down payment), and homebuyers suddenly have to reassess what’s affordable.
“As a townhouse realtor who has focused on the Vancouver market for well over 10 years, I can tell you there’s robust interest in the market,” says Ariane. “Healthy demand and reduced supply are part of what have triggered this seller’s market. Today, many people selling townhouses and condos are seeing multiple offers, because there is limited supply. People need somewhere to live, and the new mortgage rules mean targeting more modestly priced properties for some families.”
The average cost of a townhouse in Vancouver reached $803,700 last month—that’s up 18.5% year over year. And while that’s expensive, it’s a bargain when you consider the average price of a detached house in Vancouver is now over $1.6 million.
“Homebuyers with an approved mortgage of 2.9% now have to prove that they can financially absorb a 2% rate hike,” explains Ariane. “This essentially means that people have less buying power, but it also means there’s breathing room in the event of a rate hike. And that’s not a bad thing.”
A seller’s market is determined by a sales-to-active-listing ratio. In other words, what percent of what’s listed actually sells. 15% to 20% is considered balanced. Under 15% is a buyer’s market. Anything above 20% is a seller’s market.
“At present, the active sales-to-active-listing ratio for Vancouver townhouses and condos is 59.6%,” explains Ariane. “It’s remarkable. And that makes it a great time to list townhouse.”