There’s yet more indication that brokers who snoozed during a busy winter/spring season may lose out as Canada’s biggest and strongest real estate market finally shows signs of cooling.
GTA Realtors are now reporting a flat number of sales for the first 14 days of June -- those 4,597 sales virtually on par with the number a year earlier.
At the same time, the total number of new listings entering the MLS system grew by 16 per cent to 8,382 – another indication prices are headed for a slight correction, say analysts.
The average selling price, in fact, rose over 8 per cent from the year-ago period to $516K. The price gains are now skirting the top edge of affordability for even solid A clients, charge some mortgage brokers working the GTA and anticipating the growth of preapprovals.
Any move by homebuyers to wait out the market would hit mortgage brokers after a brisk first quarter. It would also come as refi and HELOC deals are negatively impacted OSFI’s intended crackdown, expected later this month.
While, the federal regulator is now prepared to drop the idea of requalification at renewal, it is moving ahead for other changes set to reduce the number of originations for brokers.
“OSFI is maintaining its position that the HELOC component of a mortgage be restricted to a maximum loan-to-value ratio of 65 per cent,” writes the regulator’s Mark Zelmer in a letter to financial institutions earlier this month. “HELOCs are inherently riskier products, given their revolving nature, persistence of debt balances and their ineligibility for mortgage insurance.”
That change, along with more checks and balances for underwriting decisions, is likely to clamp down on housing demand for the rest of 2012, according to one veteran mortgage broker, suggesting industry players who were slow out of the starting blocks this year will be hard-pressed to make up for lost ground.