Homebuyers did not overwhelmingly jump to purchase in the South Okanagan even with adjusted mortgage rules by the federal government.
“When it was first announced, activity increased on single family homes and townhomes below $350,000. I think it was new home buyers jumping in, but that did slow down as we drew near to this date. It waned off after the initial reaction to the announcement,” said James Palaino, president of the South Okanagan Real Estate Association.
In February the federal government announced a number of measured steps to support the long-term stability of Canada’s housing market. The government adjusted the rules for government-backed insured mortgages to require all borrowers meet the standards for a five-year fixed rate mortgage even if they choose a mortgage with a lower interest rate and shorter term, lowered the maximum amount Canadians can withdraw in refinancing their mortgages to 90 per cent from 95 per cent of the value of their homes and eliminated the 35-year mortgage.
Even with the changes Palaino said the market is fairly flat. A different scene from what it was in 2007 before the market slowed down in 2008.
“It’s not an exciting market right now. It is fairly consistent. It is good because people that need to buy and sell are doing just that. People that are speculating, well there is no reason to. People that at one point were just putting their home on the market because they thought they could get a good buck for it are not doing that either,” said Palaino.
The president of the South Okanagan Real Estate Association said he doesn’t see substantial price increases or decreases in the upcoming spring season, but does expect to see more houses on the market.
“I would fully expect a lot more within the next probably four to six weeks depending on our weather. Your house presents itself best when things start to green up and brighten up. Typically there is price increases in the spring, so I think buyers also will expect even though there is an increase in listings buyers will expect some slight increases I don’t think it will be anything substantial though,” said Palaino.
According to the B.C. Real Estate Association, the inventory of homes for sale is expected to edge higher as the number listings to the market advances during the first two quarters of 2011. Cameron Muir, BCREA chief economist, said the Okanagan market will trend from a buyer’s market towards balanced conditions.
“British Columbia housing markets are returning to normalcy after two years of volatility,” said Muir. “Employment and population growth will fuel consumer demand over the next two years. However, higher mortgage interest rates and tighter credit conditions for low equity home buyers will limit home sales to below the 10-year average of 87,600 units.”