Vancouver Island brokers vividly remember the wasteland that was the mortgage landscape in Victoria, following the tightening of the amortization rules in July of 2012 – the summer of damage control.
“It was brutal when the changes came into effect,” says Sylvia Sigurdson, a broker with Verico
, Mortgage Depot, in Victoria, British Columbia. “It was a good four to five months of almost nothing after the amortization rules were changed. But I feel it has recovered.”
Sigurdson remembers panicking clients phoning the office, fearful that their existing 35-40 year mortgages would all-but disappear with the new rules.
“Many clients didn’t realize they (the rules) were for high-risk ratios, not relevant to them,” she told MortgageBrokerNews.ca. “We were pretty busy the first few months that summer educating, emailing and writing letters to summarize what the new rules really meant. We had a lot of people who were afraid.”
Phil Wooster, the chief mortgage officer at First Island Financial in Victoria, still sees the damage done by the amortization rule changes instituted by Finance Minister Jim Flaherty
over a year ago.
“It has been a tough year,” says Wooster. “We’ve got prices here that are at the lowest ever and demand is low too. And despite this the retirees who usually come here are still staying away. Condos are toast – it has definitely been a tough year here in British Columbia.”
Sigurdson agrees that 2012 was tough, but sees consumer confidence returning despite so-called experts predicting a housing bubble or crash.
“Many put their housing dreams on hold at first,” she says, “but I look at the June-to-June stats, and home values have risen by 4 per cent. Although a lot of statistics can be misleading – there were so many doom and gloomers who were twisting the figures to say ‘the sky is falling’ – I believe the increase in home value shows a recovery.”
For Sigurdson, she has seen that recovery first hand.
“I found in Victoria, this spring, it was pretty busy,” she says. “True, we had a late spring here, but my numbers were definitely better than last spring.”