A 'For Sale' sign in Hope.

A 'For Sale' sign in Hope.

Real estate market sees seasonal slowdown

Realtors discuss the effects of new federal and provincial legislation.

Hope’s real estate market is entering into a seasonal slowdown, realtors say.

From August to October, data provided by the Chilliwack and District Real Estate Board show that sales have dropped from a peak of 31 unit sales in August to a low of 11 in October.

Median prices have gone from $280,000 in August to a peak of $292,000 in September and down to $211,000 in October.

“We’ve returned to a more normal market,” said realtor Rob Pellegrino. “We haven’t seen a slowdown that has been out of the ordinary. We’ve just seen it slow down generally for this time for the year.”

In this time frame, buyers had to also face new policies such as the foreign buyer tax and new federal rules that ensure buyers are not overextending on mortgages.

Both Pellegrino and realtor Wayne Dyble agree that the foreign buyer tax had minimal impact on Hope.

Dyble noted that as a result of the tax, foreign money has headed to Toronto or Vancouver Island.

There was some speculation that Hope could see foreign money come to town because of the tax.

More importantly, the new federal rules put into effect Oct. 17 had more impact on Canadian buyers, which cuts into their ability to buy.

Pellegrino explains that the most pertinent rule is one that requires a buyer to qualify for the highest mortgage possible — the five-year rate, currently 4.64 per cent as of Nov. 24— before a buyer could get the lower rates.

“So they’re basically making sure that no one gets stuck years down the road and not being able to pay their mortgage in a rising interest rate environment,” said Pellegrino.

Dyble elaborated that banks, therefore, do not have to loan as much, hedging against bad loans.

“So if rates go up, you can still make the payment.  It also saves them from lending as much money on the appraised value,” he said. “Therefore when prices come down, they’ve got a bit more of a blanket of protection there when they foreclose.”

Pellegrino says this cuts off borderline borrowers  and could eliminate foreclosures five years from now.

This change is critical because, both realtors note, people in the Lower Mainland move eastwards to seek more affordable homes.

In the one-month period where the new rules have come into effect, Pellegrino has not seen this cascading effect reach Hope.

Dyble expects that those new rules will drive people towards Hope, if they do not want to compromise on home quality in their preferred areas.

“Because if you could not qualify in Chilliwack, maybe you’re going to look in Hope,” said Dyble.

Both realtors also noted that the future for real estate is unpredictable. Dyble believes that many people are undecided on whether to enter the real estate market.

He noted that media consumption might lead people to believe that prices are falling. He also noted that increases in interest rates might signal to people with pre-approved rates to enter the market before their offer of a lower interest rate expires.

Pellegrino noted that some people are worried about the next moves from government policy.

He noted that there is some talk from the Canada Mortgage and Housing Corporation about raising the required down payment for mortgage insurance to 10 per cent.

“That will be huge,” said Pellegrino.

Should those rules change, that will eliminate the ability of buyers with less than 10 per cent down payment from entering the market.

He noted that there is nothing positive in the future that will help people enter the market, and staying undecided is likely the wrong path forward.

Dyble noted that the best time for a clearer picture about Hope’s real estate market would be in the spring as the wintertime decline in Hope’s real estate market might blur trends.

Just Posted

Cpl. Scott MacLeod and Police Service Dog Jago. Jago was killed in the line of duty on Thursday, June 17. (RCMP)
Abbotsford police, RCMP grieve 4-year-old service dog killed in line of duty

Jago killed by armed suspect during ‘high-risk’ incident in Alberta

Kalyn Head, seen here on June 4, 2021, will be running 100 kilometres for her “birthday marathon” fundraiser on July 23. (Jenna Hauck/ Chilliwack Progress)
Woman’s 100-km birthday marathon from Chilliwack to Abbotsford will benefit Special Olympics B.C.

Kalyn Head hopes run raises awareness, advocates for inclusion of people with intellectual disabilities

Dancers from the Sts’ailes First Nation perform the eagle dance at a welcome banner dedication ceremony on Thursday, June 10. “Ey Swayel” is a Halq̓eméylem term translated as ‘a good day.’ (Adam Louis/Observer)
VIDEO: ‘A good day’ for Agassiz school as Sts’ailes welcome banner is dedicated

Banner hangs above the school’s entrance, welcoming students, staff and visitors

Missing Abbotsford man Adam Hobbs was found deceased on Thursday evening (June 17).
Body of missing Abbotsford man Adam Hobbs found

Hobbs was reported missing Monday after leaving his job site in Langley

UFV athletes were honoured for their strength and perseverance during the pandemic. (UFV photo)
Fraser Valley athletes recognized in year without sports

UFV Cascades athletes honoured for strength shown during the pandemic

Marco Mendicino, Minister of Immigration, Refugees and Citizenship during a press conference in Ottawa on Thursday, May 13, 2021. THE CANADIAN PRESS/Sean Kilpatrick
Canada to welcome 45,000 refugees this year, says immigration minister

Canada plans to increase persons admitted from 23,500 to 45,000 and expedite permanent residency applications

Emily Steele holds up a collage of her son, 16-year-old Elijah-Iain Beauregard who was stabbed and killed in June 2019, outside of Kelowna Law Courts on June 18. (Aaron Hemens/Capital News)
Kelowna woman who fatally stabbed teen facing up to 1.5 years of jail time

Her jail sentence would be followed by an additional one to 1.5 years of supervision

The George Road wildfire near Lytton, B.C., has grown to 250 hectares. (BC Wildfire Service)
B.C. drone sighting halts helicopters fighting 250 hectares of wildfire

‘If a drone collides with firefighting aircraft the consequences could be deadly,’ says BC Wildfire Service

A dose of the Pfizer-BioNTech COVID-19 vaccine is pictured at a vaccination site in Vancouver Thursday, March 11, 2021. THE CANADIAN PRESS/Jonathan Hayward
NACI advice to mix vaccines gets varied reaction from AstraZeneca double-dosers

NACI recommends an mRNA vaccine for all Canadians receiving a second dose of a COVID-19 vaccine

A aerial view shows the debris going into Quesnel Lake caused by a tailings pond breach near the town of Likely, B.C., Tuesday, Aug. 5, 2014. THE CANADIAN PRESS/Jonathan Hayward
Updated tailings code after Mount Polley an improvement: B.C. mines auditor

British Columbia’s chief auditor of mines has found changes to the province’s requirements for tailings storage facilities

A North Vancouver man was arrested Friday and three police officers were injured after a 10-person broke out at English Bay on June 19, 2021. (Youtube/Screen grab)
Man arrested, 3 police injured during 10-person brawl at Vancouver beach

The arrest was captured on video by bystanders, many of whom heckled the officers as they struggled with the handcuffed man

Surrey Fire Service battled a dock fire along the Fraser River late Friday night (June 18). It was on Musqueam Drive, near Industrial Road, around 10:45 p.m. (Photo: Shane MacKichan)
VIDEO: Fire engulfs pier on Surrey side of the Fraser River

Dock has reportedly been unused for a long time

People in Metro Vancouver can expect to experience a short wave of heat just in time for Father’s Day, according to Environment Canada. (Black Press Media files)
Short-lived heatwave headed for Metro Vancouver this weekend

Temperatures are expected to be up to 10 degrees higher than average Sunday and Monday

Most Read