Never mind that sales were plummeting even before mortgage changes were enacted in July, the full court press is ramping up against the Federal Government to undo the mortgage regulations they recently imposed.
As if that was the cause of the problem.
With the September surge now rendered a false hope, blame begins.
The Globe and Mail picks up on the Industry's wrath:
The federal government eliminated the approval of 30-year amortization periods on government-backed mortgages in June – and the decision’s impact can now be seen most vividly in the cooling off of Greater Vancouver’s market, with sales falling for everything from entry-level homes to luxury houses... Real estate sales across Greater Vancouver are sinking. There were 1,516 residential properties that changed hands in September in the region, down nearly 33 per cent from the same month last year. In West Vancouver, where the posh British Properties are located, the number of detached homes sold fell to 43 last month from 71 a year earlier.
But should the Canadian Federal Government back off on the changes to the mortgage rules they introduced in June?
“There’s been a clear reduction in buyer demand in the three months since the federal government eliminated the availability of a 30-year amortization on government-insured mortgages. This makes homes less affordable for the people of the region.”
As condo sellers - who can’t unload their places - aren’t able to then purchase larger residences, the result is a dampening effect in the overall market.
Even in the higher end of real estate, buyers who could borrow heavily in the past are no longer able to qualify for as much mortgage funding.
"I am predicting increased sales in 2013 because of continuing low interest rates, population growth and more full-time jobs."
But what about sales for the rest of this year, in 2012?
"Employment growth in the Greater Vancouver area in the first seven months of the year has been 3.5 to 4 per cent higher than the same period last year. I would expect to see sales pick up before the end of the year, at least on a seasonally adjusted basis."
"If there was a large number of unsold units coming onto the market or a huge change in the economic environment, that would really cause prices to tank. Most people don’t have to sell their house. You bought it for $200,000. The price is now $150,000. Unless you have to, why would you sell it?” For prices to go down significantly, you need people who have to sell, either because the economy has collapsed and they don’t have any income or developers have built a whole bunch of units that are unsold and the bank is screaming at them or foreclosing or something like that. None of those conditions appears imminent. It would take some negative shock, such as an economic meltdown or mortgage interest rates jumping from four per cent to nine or 10 per cent, to trigger lower prices."
So all these concerns that sales are stagnating, that this will prevent move up buyers, which will - in turn - fail to keep the market moving thus creating a domino effect leading to a drop in prices... this is all a load of shite?
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