Year-over-year price increases in key Canadian markets are concealing a significant slowdown in actual sales, according to a national price survey released Thursday. Unfortunately, for brokers, that trend, already identified by CMHC, is expected to continue in the second half of the year.
By the end of 2011, the national average house price is expected to be 7.7 per cent higher than it was at the end of 2010, reads the Royal LePage House Price Survey and Market Survey Forecast.
The number of sales has generally been in the opposite direction. Nationally, sales volume is forecast to decrease by 2.0 per cent over the same perio, with markets like Toronto facing larger drops. In the country’s largest market, the volume decline is because of a lack of inventory. The effect has been to create a seller’s market, with annual price gains of 4.7 per cent to 6.1 expected.
Vancouver is forecast to rack up higher prices and higher volumes by the end of 2011. “It experienced some of Canada’s largest year-over-year price increases with detached bungalows rising 14.1 per cent,” reads the report. At the end of 2011, average house prices in Vancouver are forecast to be 15.4 per cent higher than 2010. Unit sales in Vancouver, during 2011, are expected to be 6.0 per cent higher than 2010 indicating strong market activity.
That projection doesn’t necessarily jive with the experiences of brokers, now grappling with a decreasing number of originations and turning to refis.
“The market has now slowed,” Luisa Hough, owner/broker of Exclusive Mortgage Professionals in Surrey, told MortgageBrokerNews.ca. “But there are opportunities out there. I’ve been in this business for eight years and every day I’m out there looking to see how I can get business. That’s how this business works.”
A step-up in bank competition is also challenging brokers in their hunt to maintain, if not grow, originations.
“I’ve had about three or four recent cases where the banks were willing to eat the penalty in order to keep a refinancing client,” Jessi Johnson, president of Verico Jessi Johnson Mortgage Team, told MortgageBrokerNews.ca.” The scenario is similar to those of a handful of brokers working the increasingly competitive Vancouver market, as banks and large credit unions sharpen their elbows in order to grow and retain clients.