Brokers warn the federal government not to read too much into the July spike in home sales, specifically the 9.4 per cent rise highlighted in the latest Canadian Real Estate Associate (CREA) report.
“The mortgage business is seasonal, it goes up and down,” Sundeep Saggu of Verico The Mortgage Wizards told MortgageBrokerNews.ca. “June and July are always busy and it’s just an isolated increase based on the fact that it’s summer.”
Clients are becoming more aware of trends in the marketplace, which has also caused an influx of eager buyers to move up buying plans.
“Clients are more educated on markets and the pending rate increases have influenced clients to buy,” Saggu said. “Numbers will come down in the fall and a wait-and-see approach won’t be a bad idea; if they wait they will have a better idea about any regulations that may be needed.”
Whatever course of action – or inaction -- the federal government decides on, Saggu is ready.
“I worked as an underwriter for CMHC before and you understand that side – that understanding allows us to restructure our clientele base,” he said. “And our approach to clients helps us offset the regulations and grow our business.
“The number one thing that is important is it has come away from just providing a mortgage and never seeing the client again.”
Indeed, planning may be the key to preparing clients for the road ahead.
“It’s important now to put a plan in place for you clients about what they plan to be 10 years from now,” Saggu added. “You can mitigate any of the issues they will encounter in the next few years. These clients won’t have to worry and they won’t get caught off guard by new regulations in terms of budgeting. “
As for the rest of the year, brokers share the belief that the market will cool following a fiery July.
“It’s slowing now in our area, as it does every August,” Ron Price of Dominion Lending Centres Forest City Funding told MortgageBrokerNews.ca. “I think things are going to be pretty even; I don’t foresee a lot of change, negative or positive.
“I think (Ottawa) has tightened it as much as it should.”