Mortgage professionals in rural areas and smaller markets are more likely to feel the chill of the cooling market as the CMHC report housing starts drop for the third month in a row.
“The slowdown will wreak more havoc in the rural setting,” said Derek Rowley, mortgage agent with Real Mortgage Associates in Aylmer, Ont. “We already have a smaller market compared to brokers in large city centres and a slight downturn in the economy or a loss of a town employer can have a huge impact in our business.”
Rowley was reacting to a recent report from CMHC indicating that starts for single homes in urban areas fell by 5.4 per cent to 58,606 units while starts for condos and multiple units slide by 3.2 per cent to 115,717 units. The plummet marked the third month in a row that starts were down this year.
The average home price for 2012, according to the CMHC, is between $351,300 and $378,400. The CMHC predicts a slight rise in prices for next year to between $358,000 and $395,800.
Even refinancing transactions, a traditionally reliable revenue stream for mortgage brokers, appear to be on the verge of drying up as the CMHC recently reported a 31 per cent decline in refi business.
“We can’t rely on refis anymore,” said Rowley. “With the mortgage rule changes, a lot of our clients don’t qualify especially with the new cap on LTV’s.”