KELOWNA – Typical for December, volumes in residential sales declined this past month, with 459 sales posted to the MLS, a 24 per cent decrease from November, but comparable to last year’s sales of 453 units, reports the Okanagan Mainline Real Estate Board (OMREB).
“Outside of a couple of variances, the market is doing what it generally does this time of year,” says OMREB President Tanis Read, noting a general slowing of activity.
“Sales and listing volumes were both on-trend for this time of year, but, interestingly, average price and days on market bounced back from November.”
New listings were 465, down 65 per cent from November, but relatively consistent with this time last year, when new listings were 407.
Average price, however, rose 3.5 per cent over November and 12 per cent over a year ago. Also of note was the days on market, which declined to 79 from last month’s 132, and last year’s 91.
“Higher average price can often reflect the composition of product sold over the course of the month,” says Read. “But coupled with the fewer days on market, it may also suggest a continued lag in resale product availability, potentially coupled with consumers possibly looking to lock in purchases before new mortgage rules take effect in January.”
Effective January 1, new federal mortgage tightening rules require borrowers, even those with a down payment of 20 per cent or more, to face a stress test when renewing or refinancing a mortgage to prove they can cope with the risk of higher interest rates.
“The seventh round of rule tightening by Canada’s federal financial regulator since 2008, these new rules impact both those seeking a mortgage as well as those refinancing their mortgage,” notes Read, adding “the impact may be that those now in the market for a home may have to settle for a less expensive home or wait and save up for a larger down payment.”
Read points out that lenders won’t have to apply the stress test to clients who are renewing an existing mortgage.
Composition of buyers, based on figures from a month earlier, was as follows:
- 54 per cent from within the region;
- 21 per cent from the Lower Mainland/Vancouver Island;
- 8.5 per cent from Alberta; and
- 3 per cent from outside Canada.
Consistent with previous months, those relocating and moving to similar property types, first-time buyers and move-up buyers were all within points of each other at 21 per cent, 19 per cent, and 19 per cent respectively.
Likewise, two-parent families with children and couples without children were close at 29 per cent and 26 per cent, with empty nesters/retired buyers the next largest group at 17 per cent of the buyer population.