Canada’s incoming mortgage stress test for uninsured buyers likely led to the higher number of sales finalized in November — the largest number for that month in 21 years, said the president of the Victoria Real Estate Board.
November’s 671 sales also beat October’s total of 664 sales.
It is unusual for November’s sales numbers to come in higher than October’s, board president Ara Balabanian said Friday.
The stress test coming into effect on Jan. 1 is the latest move by the federal government to tighten mortgage rules. It will apply to borrowers who have taken out uninsured loans in order to make sure they can manage financially if interest rates increase.
Last month’s sales were up by 12 per cent from the 599 properties sold in November 2016.
Higher sales numbers had been anticipated because of the new test, said Balabanian.
Sales numbers and comments from real estate agents last month showed that “some buyers have indeed accelerated their purchasing plans to avoid the stress test,” he said.
This would mean that some people who had planned to buy in early 2018 chose instead to purchase a couple of months earlier.
“The fact that we’ve had an unusual month does not necessarily mean that this is the start of a new trend. It is however, a good example of how outside forces can impact a housing market,” Balabanian said.
He anticipates that more government changes will be coming up in 2018 and is hoping that different levels of government co-ordinate their efforts to avoid a negative effect on the market.
Last month, the benchmark price for a single-family house in the core area of the capital region was $824,600, up from $748,500 in November of last year.
The record benchmark price in the core was set in July when it reached $834,200.
Inventory remains tight in Greater Victoria with 1,764 listings at the end of November, down from 1,815 the same month last year.
Activity also remains strong north of the Malahat, where
426 properties changed hands last month, up from 346 a year ago. Sales were slightly lower than October with 458 sales.
The Vancouver Island Real Estate Board’s area remains a seller’s market, where inventory is tight, said president Don McClintock. Each community measured by the board saw increases in values of all types of housing.
A benchmark value for a single-family house in the entire region climbed to $463,200, up 17 per cent year-over-year. The benchmark for a condominium moved up to $274,100, or 26 per cent over the same time, and the benchmark for a townhouse was $359,200, increasing 21 per cent.
Parksville-Qualicum posted the highest benchmark price last month at $525,600, an increase of 16 per cent from last year. Port Alberni was the lowest at $252,700, but still up by 18 per cent.