On October 17 2017 the announcement was made that as of January 1st 2018 buyers will qualify for a smaller mortgage than they do today (read this from the Financial Post for more details on the upcoming changes http://business.financialpost.com/real-estate/mortgages/canadas-banking-watchdog-sets-new-rules-for-mortgage-lending). The immediate impact has been noticeable. This is a short term analysis that, despite its small sample size, can’t be ignored.
As of today we are about 10 days into a wave of aggressive and urgent behaviour across all price bands. We know it’s a result of the announcement because we saw properties (average condos and houses for the area) that had sat on the market for 3+ weeks get a surge of interest. The announcement was made and the next week these properties were selling with multiple offers over their asking price. It is highly unusual for a listing more than two weeks old to sell over the asking price and we are seeing it again and again.
What does this mean for the rest of 2017? I suspect this trend to continue. Those who didn’t pounce in the past two weeks fear losing their buying power and could keep this wave moving to the end of the year.
The big mystery is the start of 2018. Will fear be the predominant emotion? If so, expect a slow, cautious start. Never underestimate the demand for housing in our region. Too many people feel pushed out. Prices could drop just slightly. They reach a point of acceptable affordability for just a small segment and buyers are jumping on it. Demand is too high to have the patience to wait out sellers and drive down their prices.