Mortgage wars heat up Vancouver’s already hot real estate market!

A lowering of a popular financing option for home buyers could cause more harm than good for at least one Vancouver couple.

“Why couldn’t [interest rates] just go up to where they were before, and we would probably be able to find a place?” asks Melanie Lee. She and her husband are looking to buy their first home, but have found themselves on the losing end of several bidding wars.

“It always feels like you’re getting slapped down and not winning the war. It’s a very tough market,” she says.

Virtually all major Canadian banks have lowered their five-year fix term mortgageto 2.79 per cent in recent days, the second major reduction they’ve made since the Bank of Canada lowered its overnight interest rate to 0.75 per cent in January.

READ MORE: Mortgage rates are dropping — so how much house can you handle?

It’s one of the reasons that Vancouver’s housing market has surged in recent months. The Real Estate Board of Greater Vancouver said total sales in February were 20.2 per cent above the 10-year sales average for the month. They also reported the average price for a single family detached property in Metro Vancouver is now over a million dollars.

“These housing are selling 100 to 200 thousand above asking price. As a first-time home buyer, it’s very frustrating,” says Sherlock Yam, a mortgage broker for Verico Clear Trust Mortgages.

READ MORE: ‘Average’ million dollar homes now being seen throughout Metro Van

“We’re seeing a lot of people who own houses see how crazy the market is going, and they’re listing their properties, hoping to get way above asking price, which is what’s happening.”

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© Shaw Media, 2015

• by  Canadian Press - BC Local News
• posted Mar 18, 2015 at 2:21 PM— updated Mar 19, 2015 at 3:44 AM

No plan to cool hot housing market: Harper

Prime Minister Stephen Harper announces a government initiative to help assist small and medium-sized businesses to open new markets abroad, in Mississauga, Ont. on Wednesday, March 18 2015. THE CANADIAN PRESS/Chris Young

— Image Credit:

By The Canadian Press

MISSISSAUGA, Ont. - Prime Minister Stephen Harper says the federal government is keeping a careful watch on borrowing and lending tied to the country's hot housing market.

But Harper says Ottawa has no immediate plans to take action to cool it down, like it has in the past.

Responding to a question in Mississauga, Ont., he said debt-servicing costs are falling and default rates remain extremely low.

Harper made the remarks at a time when big banks and other lenders are cutting mortgage rates to kick off the spring real-estate season.

They also come amid concerns Canadians have piled on too much debt and worries that housing markets in Toronto and Vancouver have become overheated.

Harper says he's not "unconcerned" about the housing-market situation, but he believes Canada's financial institutions remain very strong.

• 90% rental offset:  This treatment of unauthorized or legal suites can make a huge difference to obtain the financing required or obtain a variable rate mortgage.
• New low fixed rate with cash back: Currently I have a lender willing to provide cash back with 5 year fixed rates as low as banks rates. Requirements are more difficult, but this is a great offer for those who qualify.
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• Private lending options: This can be a great solution to access up to 90% of the equity in your home to bridge time to allow customers to qualify back to discounted rates or to pay off debts which are at much higher rates.

(Surrey, BC) – In February, sales of all property types in the Fraser Valley increased by 21 per cent in one year with demand for two property types in particular - single family detached homes and townhomes - outpacing supply.

Last month, the Fraser Valley Real Estate Board processed 1,337 sales on the Multiple Listing Service® compared to 1,102 sales in February of last year. New listings in February totaled 2,610 which added up to 7,864 active listings, up from January’s 7,307 but a decrease of 4 per cent compared to February 2014’s 8,210 active listings.

“It was our busiest February since 2007,” says newly elected Board President Jorda Maisey. “In my community of Langley, the average number of days to sell a detached home is now less than one month and it’s a challenge finding the right product for some of our buyers, however every area is different. To understand the market for your home in your neighbourhood, talk to your REALTOR®.”

A measurement the real estate industry relies on to gauge the health of the housing market is the ratio between sales and active listings. For the Lower Mainland, the balanced range is between 12 and 20 per cent; which means when it’s less than 12 it favours buyers and greater than 20 it favours sellers. The ratio in February for single family detached homes was 26 per cent; townhomes 22 per cent and apartments 12 per cent.

Maisey adds, “Our best seller in the Fraser Valley remains the single family detached home, followed by townhomes in part because almost half our buyers are families with children, but also because these products are so much more affordable in the Fraser Valley. With a typical townhome costing less than $300,000 and interest rates so low, many first-time buyers are finding they can get more for their money here.”

The MLS® HPI benchmark price of a Fraser Valley single family detached home in February was $581,400, an increase of 4.2 per cent compared to February 2014 when it was $558,100.

In February, the benchmark price of townhouses was $297,200, a decrease of 0.6 per cent compared to $298,900 in February 2014. The benchmark price of apartments also decreased year-over-year by 1.8 per cent, going from $193,200 in February 2014 to $189,700 in February 2015.

Across Fraser Valley, the average number of days to sell a single family detached home in February was 41 days, ten days faster than last year. Townhouses on average took 55 days to sell; one day faster than last February, while Fraser Valley apartments sold on average in 70 days, on par with February 2014.