Brokers beware: Home sales will get even slower this year, says forecast

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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.

  • Frustrating market on 2011-07-08 4:27:58 AM

    What I find really infuriating is the lenders that only want to pay you on the top up even when it is up for renewal. The lender doesnt have a policy to allow such a thing. In both cases in the last 3 weeks I have informed the clients regarding the pay cheque I will receive by sending it elsewhere. Both were totally okay with the move so I could be paid for the whole amount. You see by talking to the client that avoids a back end deal from the lender. Honesty works. But what bothers me is I recently did a increase on an existing mortgage for $40k the mortgage was then 310k I only got paid on the top up amount. It had to go back to the solicitors and it was a refi. I was not informed by the lender (scotia) that this is their policy. I know every other lender is up front about this as they know this would determine where I place the refi. When I questioned it I was told that it has to be within 90 days of renewal to request a refi - this is after the deal has funded. I was 93 days. They didnt even give me the option of having the client pay a penalty. The bottom line is they didnt tell me. Scotia used to be my number one lender...

  • Kelly Rowe on 2011-07-08 6:17:13 AM

    Right above this box there is a line that says, "Broker news forum is the place for positive industry interaction..........." I don't see a lot of positives being reported here lately, quite the opposite in fact. I'd like to see some success stories about the broker world instead of all the doom and gloom and belly aching that's been going on. : ) just my opinion

  • Doug Pfeiffer on 2011-07-11 11:57:22 PM

    When did we go to the polls on the issue of long-time brokers requiring "Re-Education", no doubt at a big cost ("tax") to do business in this province (Ontario). No wonder licencing stats show in 2010 there were 123 new brokers, and 165 licence surrenders. More quit than joined. We must write our MPP's and stop this bureaucratic idiocy. It's all about the money, our money.

Broker news forum is the place for positive industry interaction and welcomes your professional and informed opinion.

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