Vancouver has seen better days, according to local mortgage broker Iain Macfadyen.
“There are a lot of people who qualify for a mortgage, but not at a number realistic enough to even buy an apartment in Vancouver,” said Macfadyen of Vanderkamp Vancouver Mortgage. “A lot of them go back to the drawing board, and if they don’t want to move further away from Vancouver, they stay in the rental market.”
Not that finding a rental in a city with a 1.4% vacancy rate, according to RateSupermarket, is a walk in the park.
Macfadyen says that while many real estate and mortgage professionals loathe admitting Vancouver is a buyer’s market, it is certainly the case. For starters, there simply aren’t enough buyers willing—or even capable—of meeting sellers’ demands.
“It’s become a buyer’s market now—it’s actually been that way for about a year now,” he said. “The stress test is taking a lot of people out of the market and sellers are beginning to understand they have to sell their homes with the reality of the market—that it has to be affordable. Inventory keeps going up in the city without enough buyers coming in, so prices are pressuring downwards.”
Fixed interest rates are beginning a downward push as well, and that could catalyze activity, surmised Macfadyen, but that’s only if buyers first qualify.
In recent weeks, the Financial Institutions Commission has come down hard on brokers working in tandem with unlicensed brokers. While he says it’s inexcusable, Macfadyen isn’t completely surprised to hear these stories.
“I’m not really surprised because it’s more in the private mortgage market,” he said. “Certain people will work in that grey area where they consider themselves consultants and maybe arrange a few mortgages a year and not actually become licensed. Sometimes people working in banks will even send them declined clients. There are always going to be some unscrupulous actors. Even brokers who have lost their licenses will still do the same shady business, but they just shield themselves better.”