(Black Press Media files)

Rate hike could ‘compound’ slowdown of B.C real housing market: realtor

Rate increase will likely mean buyers take a more cautious approach

The Bank of Canada rate hike announced earlier Wednesday morning could continue to slow down the B.C. real estate market, according Royal LePage West Real Estate Services.

In a statement, the bank said the 0.25 per cent increase to a 1.75 per cent rate was in response to the recently signed trade deal between Canada, the U.S. and Mexico.

Adil Dinani, a realtor with Royal LePage, said although the rate hike meant the Canadian economy was moving in a positive direction, it could temper the B.C. real estate market.

“This is a marginal increase, but if you look at the past 12 months, we’ve seen rates move up over one per cent,” said Dinani.

“This does create some challenges on behalf of borrowers, [both] to get approved and to manage those increasing borrowing costs.”

Dinani said that the rate hike will likely have “compounding effect” on the housing market slowdown already caused by new mortgage rules and the anticipation of the NDP’s speculation tax.

The latest figures from the B.C. Real Estate Association show that residential sales were down by 33 per cent this September, compared to the same month last year.

In Greater Vancouver, sales dropped by 43 per cent and the South Okanagan saw a decrease of 49 per cent.

“They’re all leading towards a cooler housing market in Vancouver,” said Dinani.

“When you have a plethora of policy changes being thrown at any market, buyers take more of a cautious approach.”

Dinani cautioned that although a drop in the housing market may seem strange after a decade of near-constant growth, it is a normal feature of a cyclical sector.

“It’s normal for markets to have corrections and adjustments,” he said.

“These corrections are normal, natural and I would say healthy for the long-term sustainability of the market.”

READ MORE: Startup offers $1 way into B.C. real estate

In places like Greater Vancouver sales have dropped by more than 40 per cent compared to this time last year, but Dinani doesn’t foresee a crash.

“The narrative of why everyone was buying is still very much intact: the desirability of living in Vancouver, the political and fiscal climates are all very positive,” he said.

“I think we’re still going to see the demand from people that are migrating here.”

Dinani said most of the effect will be concentrated on those still looking to buy into the housing market, rather than those with mortgages.

“A lot of clients are on five-year fixed mortgages so this increase doesn’t impact them whatsoever,” he said.

“The group that it does impact are the group that took on variable mortgages… those folks will be marginally impacted on a monthly basis.”


@katslepian

katya.slepian@bpdigital.ca

Like us on Facebook and follow us on Twitter.

Just Posted

Fire Hall Kitchen and Tap’s second annual Happy Camper Day Thursday

Every pint purchased April 25 goes towards sending kids to summer camp

Community choirs preparing for Mountain Voices tour

Three local choirs set for three performances in Crowsnest Pass, Fernie and Cranbrook

New lights shine on local stage

Upgrades at Studio Stage Door theatre illuminate a new era for Cranbrook Community Theatre

Cranbrook hockey player heads to U15 provincial tournament

Owen Johnson is one of two Cranbrook hockey players attending the annual event

Special Olympic athletes work on public speaking

The Kimberley/Cranbrook Special Olympics had two athletes build up their public-speaking skills

VIDEO: ‘Alarm bells’ raised by footage allegedly from B.C. pig farm, SPCA says

PETA released video Wednesday showing dead and injured piglets next to nursing piglets

Hugs & Slugs

Slugs: Huge Slugs to the rude, abusive elderly couple at the Superstore… Continue reading

Female real estate agents warned of suspicious man in Metro Vancouver

The man requests to see homes alone with the female agent, police say

Can you put your phone down for Mother’s Day?

#DiningMode campaign encourages people to leave the phone alone while eating

Horgan heckled as gas prices sit at record high, could go up more

Premier John Horgan blames refiners, not taxes

SPCA investigating after newborn kittens found in Vancouver dumpster

The kittens were found suffering from hypothermia and dehydration

‘B.C. cannot wait for action’: Top doctor urges province to decriminalize illicit drugs

Dr. Bonnie Henry says current approach in ‘war on drugs’ has criminalized and stigmatized drug users

Many teens don’t know they’re vaping nicotine, Health Canada finds

Canadian Tobacco, Alcohol and Drugs Survey finds youth unaware of nicotine product risk

B.C.’s largest Vaisakhi festival target of threatening Facebook post: Surrey RCMP

Police say they are investigating the posts on Facebook, after local MLA forwarded screenshots

Most Read