WHAT’S GOING ON?
Historically June in Brantford real estate means a slight drop in demand from the spring months and a ramping up of supply and inventory as we head into the summer/fall market. The numbers as of July 1 were a bit surprising. Supply, demand, and inventory all declined from previous months. 130 deals were made last month between buyers and sellers while 195 new for sale signs were in the ground. When we look at the year-to-date numbers supply and demand are both above 2011 numbers while current inventory is down by 13% from this time last year.
Compared to last year there are more deals happening, and more properties coming on the market – but here at July 1st there are fewer homes available to purchase.
MY PREDICTIONS FOR SUMMER/FALL
Inventory levels will continue to remain low for the remainder of the year unless something drastic happens to deter the buyers. This is good news for sellers and homeowners as low inventory keeps prices appreciating. Recent mortgage rule changes (see National News below) will have little to no effect on the Brantford market, and the Bank of Canada is predicted to hold the variable rate until at least mid-2013.
Effective July 9, 2012, the rules for government-backed insured mortgages will tighten in Canada.
Canada’s Finance Minister Jim Flaherty has announced that:
1) The maximum amortization period for government-backed insured mortgages will be reduced to 25 years from 30 years.
2) The maximum amount that an individual can borrow when refinancing will be lowered to 80% from 85%.
3) The federal government will set a maximum for gross debt-service ratio (GDS) at 39% and lower the maximum for total debt-service ratio (TDS) to 44% from 45%.
Government-backed insured mortgages will no longer be available for homes with a purchase price of $1 million or more. This latest move by the federal government — its fourth since 2008 — effectively turns back the clock to the pre-2004 state of affairs, resetting mortgage lending rules to more prudent, if conservative, standards.