The real estate market is hard to make sense of currently, largely because the government is implementing change after change without allowing much time between the changes to actually analyze the effect of each change.
It is clear that the 15% foreign buyer tax has created 2 very separate and distinct markets: one for Townhomes and Condos and one for Single Family Homes. Another way to divide the market is anything less than $1,000,000 is typically moving and anything above is not moving as quickly. The real dividing line seems to be purchase prices below $900,000.
The new changes announced last week by the Federal Government for mortgage financing is most likely to affect the strata real estate market, so the condo and townhome market which is currently extremely active and competitive in all sectors and price ranges from the low end to the high end (under one million purchase price). Unfortunately it will further erode affordability for the people who need it the most both in terms of prices and purchasing power.
Inventory levels for the lower end of the market are extremely low currently and the trend has been moving lower for townhomes and condos less than $578,999.
This supply trend is what is causing the multiples in the condo and townhome market and this is likely to get worse with the new mortgage rules because it will force more purchasers into this purchase price bracket, increasing demand on an already low inventory supply.
Take a look at these inventory charts:
- Condos priced $378,999 or less
- Condos priced $379,000 to $578,999
- Townhouses priced $378,999 or less
- Townhouses priced $379,000 to $578,999
If you are currently looking for property in this market let us help you make sense of it and plot the best plan of action moving forward!