(Black Press Media files)

Rate hike could ‘compound’ slowdown of B.C real housing market: realtor

Rate increase will likely mean buyers take a more cautious approach

The Bank of Canada rate hike announced earlier Wednesday morning could continue to slow down the B.C. real estate market, according Royal LePage West Real Estate Services.

In a statement, the bank said the 0.25 per cent increase to a 1.75 per cent rate was in response to the recently signed trade deal between Canada, the U.S. and Mexico.

Adil Dinani, a realtor with Royal LePage, said although the rate hike meant the Canadian economy was moving in a positive direction, it could temper the B.C. real estate market.

“This is a marginal increase, but if you look at the past 12 months, we’ve seen rates move up over one per cent,” said Dinani.

“This does create some challenges on behalf of borrowers, [both] to get approved and to manage those increasing borrowing costs.”

Dinani said that the rate hike will likely have “compounding effect” on the housing market slowdown already caused by new mortgage rules and the anticipation of the NDP’s speculation tax.

The latest figures from the B.C. Real Estate Association show that residential sales were down by 33 per cent this September, compared to the same month last year.

In Greater Vancouver, sales dropped by 43 per cent and the South Okanagan saw a decrease of 49 per cent.

“They’re all leading towards a cooler housing market in Vancouver,” said Dinani.

“When you have a plethora of policy changes being thrown at any market, buyers take more of a cautious approach.”

Dinani cautioned that although a drop in the housing market may seem strange after a decade of near-constant growth, it is a normal feature of a cyclical sector.

“It’s normal for markets to have corrections and adjustments,” he said.

“These corrections are normal, natural and I would say healthy for the long-term sustainability of the market.”

READ MORE: Startup offers $1 way into B.C. real estate

In places like Greater Vancouver sales have dropped by more than 40 per cent compared to this time last year, but Dinani doesn’t foresee a crash.

“The narrative of why everyone was buying is still very much intact: the desirability of living in Vancouver, the political and fiscal climates are all very positive,” he said.

“I think we’re still going to see the demand from people that are migrating here.”

Dinani said most of the effect will be concentrated on those still looking to buy into the housing market, rather than those with mortgages.

“A lot of clients are on five-year fixed mortgages so this increase doesn’t impact them whatsoever,” he said.

“The group that it does impact are the group that took on variable mortgages… those folks will be marginally impacted on a monthly basis.”


@katslepian

katya.slepian@bpdigital.ca

Like us on Facebook and follow us on Twitter.

Just Posted

B.C. Interior free from measles

Vancouver measles outbreak hasn’t spread to the B.C. Interior

Skijoring gets your “giddyup” going in Clearwater

By Dawn McCormick The second annual Skijoring event took place at the… Continue reading

Veteran Welcome Program instigated by Legion

Members of the Barriere Legion Branch 242 recently announced that the Legion… Continue reading

Check out the banned books at the Barriere Library

Barriere Head Librarian, Pam Rudd, tells that this year is the 35th… Continue reading

Meet Alice at the upcoming Mad Hatter Tea Party

On Mar. 9, 2019, a certain young lady named Alice will be… Continue reading

Sell regulated heroin to curb B.C.’s overdose problem: report

B.C. Centre on Substance Use points to organized crime and money-laundering as contributing factors

Galchenyuk scores in OT as Coyotes edge Canucks 3-2

Vancouver manages single point as NHL playoff chase continues

More people signing up for compulsory vaccines

Maple Ridge mom says public tired of hearing about measles

UPDATE: Man charged in stabbing of woman, off-duty cop outside B.C. elementary school

Manoj George, 49, is facing two counts of aggravated assault and two counts of assault with a weapon after the incident on Wednesday, Feb. 20.

Why do zebras have stripes? Perhaps to dazzle away flies

Researchers from University of Bristol look into why zebras have stripes

Poll: More voters believe Canada doing worse under Trudeau government

22 per cent believed the country is doing better and 27 per cent said things are the same

HBC shuttering Home Outfitters across Canada

North America’s oldest retailer is revamping its various stores to improve profitability

BC SPCA investigates Okanagan woman with prior animal abuse convictions

BC SPCA is investigating a property near Vernon

Man wanted for sex trafficking, confinement may be heading to B.C.

Kevin Myrthil, 26, is also accused of assault on a 19-year-old woman at an Edmonton hotel

Most Read