Well, we've had our first snowfall of the year and there's no doubt that "old man winter" is on his way. In spite of the cooler temperatures and the change in Canada's mortgage rules, the real estate market remains very hot!
The Bank of Canada believes the new mortgage rules will reduce the risk of Canada's financial system becoming unstable. The new rules expand "stress tests" for borrowers to include five year mortgages, the most common kind of mortgage in Canada. Though mortgages are being offered at around 2.5 per cent today, the stress test requires borrowers to qualify at the Bank of Canada's posted rate, currently 4.64 per cent. Some in the industry say one of the effects of the new rules could be higher mortgage rates to come. As an example, if a potential homebuyer with a combined family income of approximately $125,000 was told they could afford something in the $630,000 range, they may now only be approved for something in the $500,000 range, which in Barrie thankfully, is still a lovely home, but in the GTA, will make a huge difference. This certainly could be one of the reasons we continue to see a steady influx of buyers coming from Toronto.
We don't have the October stats yet from the Barrie & District Association of Realtors® but we do have September's! Within the City itself, detached residential properties posted an average selling price for the month of September 2016 of $476,668, an increase of 24% over September 2015. Townhomes, links and semi-detached homes posted an average of $341,337 which was a 25% increase over last year. Interesting statistics for sure.
If you would like to discuss the new mortgage rules or real estate in general, please feel free to give us a call anytime. We always like hearing from you!