Brokers on Vancouver’s Lower Mainland are caught between a rock and a hard place, more specifically a glut of “overpriced” inventory on one side and, on the other, clients in no rush to convert a mountain of preapprovals, says one frustrated mortgage professional.
“What I’m experiencing – and what I’m hearing from other seasoned brokers in the Vancouver area – is that we keep checking in with preapprovals and we’re having to roll more of them over because despite the low interest rates clients are in no rush to buy,” Morris Briglio, president and senior mortgage consultant with The Mortgage Advantage, tells MortgageBrokerNews.ca. “There’s simply too much inventory on the market yet sellers are unwilling to lower their prices to meet buyer expectations.”
Hence a stalemate.
Brokers hoping to grow new-purchase originations in early 2012 are finding themselves trapped by that law of supply and demand, says Briglio, number 19 on last year’s CMP Top 50. He’s suggesting that impasse could be removed by a rise in interest rates, helping light a fire under buyers now sitting on the fence.
With the Bank of Canada holding its overnight rate steady Tuesday, that isn’t likely to happen.
A more expedient solution may be for homeowners who’ve put their properties on the market for speculative rather than compelling reasons to take them off, says Briglio.
Precedent setting interest from foreign investors helped drive up Vancouver average prices to historic levels last year, although that interest was largely limited to a handful of key neighbourhoods. Still, many property owners across the Mainland listed, hoping to ride that wave this year.
Domestic buyers are simply unwilling to satisfy their expectations, preferring to wait for the kind of correction a growing number of analysts are predicting for 2012, says Briglio.
Price increases in the Vancouver market should, in fact, slow in 2012, with average prices expected to climb 2.3 per cent, according Royal LePage. But that kind of prediction may just keep sellers from making the moves Briglio and others see as key to getting the market moving.