Real estate sales in New Westminster are holding strong even as markets drop in other areas of Metro Vancouver, says an economist with the B.C. Real Estate Association.
Sales of single-family homes in the Royal City have actually been trending higher for most of this year, Brendon Ogmundson told The Record.
"It's really kind of a stable market with a bit of an upward trend in single-family home sales," he said.
The apartment market has been relatively stable both on sales activity and pricing, but townhouse sales have been up and down, Ogmundson said.
"It's (townhouse sales) a smaller part of the market, so we kind of expect volatility there," he noted.
New West is "bucking" the trend, but it's hard to speculate why that is, Ogmundson said.
"In municipal markets, it's difficult to know what's driving things," he said. "It could be that more people are looking to New West instead of Vancouver because they kind of get pushed out of some other Vancouver suburbs."
Conditions in Metro Vancouver overall are roughly in balance for buyers and sellers, Ogmundson said.
"What happens in the summer is that listings start coming down and demand stabilizes, and we'll have kind of a balanced market over the balance of the year," he said.
Ogmundson couldn't say precisely why the Metro Vancouver market slowed down this year compared last year's.
Interest rates are still low, the economy is doing fairly well and job creation improved this year over the previous year, he said.
Ogmundson did note that immigration numbers are down, but added that fewer people coming into the country would have a "lagged effect" because they often don't purchase real estate when they first arrive.
The long-term forecast for Metro Vancouver is for the number of sales to fall seven per cent this year, and for home prices to drop three to four per cent this year and then flatten out next year, Ogmundson said.
He noted that different areas will experience different drops.
"Within the different regions in Vancouver there will be very different experiences," he said. "Obviously, there's still people buying in New West.
"There's just a lot less activity in some of the bigger parts, and those are the neighbourhoods that have more of an impact on the overall numbers," he said.
New mortgage rules that went into effect on Monday may also impact real estate sales.
The changes will likely impact first-time homebuyers, Ogmundson said.
The rules mean lenders can only issue home equity loans up to a maximum of 80 per cent of a property's value - down from 85 per cent. The maximum amortization period also drops to 25 years from 30 years.
The federal government is capping the maximum debt ratios for households and limiting government insurance to mortgages on houses that cost under $1 million.