In my last blog, I shared with you some basic statistics regarding our current market. I am reading a lot of sources and they all point in one direction only. The trend is up. Here are a few quotes from Calgary Herald article written by J.Schlesinger:
“Royal LePage’s 2021 Spring Recreational Price Forecast predicts Alberta recreational properties, which include Canmore, will see price increases of about six percent, year over year, to an aggregate price of more than $942,000 this year.”
“Alberta has the highest aggregate price for the recreational property as the Canmore area makes up a significant chunk of the market. 44 percent of Alberta realtors working in the recreational market are seeing a growing number of out-of-province buyers driving interest leading to reduced inventory.”
“Younger buyers are now looking more at traditional recreational communities close to Calgary and Edmonton as potential homes, as noted in royal LePage’s 2021 Demographic Survey. Released last month, this study found 32 percent of those aged 25 to 35 indicated the pandemic has increased their desire to move to a less dense area.”
I really like to work with first-time buyers, where I believe my patience and drive educate is getting fully satisfied. Based on the conversation with my clients I believe that the recent announcement by the Office of the Superintendent of Financial Institutions (OSFI) to raise the qualifying rate for borrowers with uninsured mortgages to greater of 5.25 percent or two percent above their contracted rate is bringing nothing but confusion to the market. Young first-time buyers and now actively trying to receive “help” from their parents and relatives to get over the uninsured mortgage threshold in a panic move to get in the market before the government does something more silly.
Instead of increasing the supply by cutting the red tape, the unintended consequence of this new stress test will be another price increase. I believe the price will go higher than the 6% based on how the market moved up in March.
The Bank of Canada (BoC) is the first major central bank this year to make reductions to its accommodative monetary policy. BoC left the interest rate where they are, but its commentary indicated that the previous promise to not touch the interest rate till 2023 is not anymore valid and interest rates might go up already in 2022.