Interest rates are on the rise and other factors at work will definitely be making the real estate market a lot more volatile.
“I think it’s going to be a tumultuous year in the industry,” said Chemainus Realtor Debbie Simmonds of Re/Max Ocean Pointe Realty.
The interest rate recently went up from 1 per cent to 1.25 per cent and more increases are expected in the year ahead, possibly two more of 0.25 each.
“It’s a domino affect,” noted Simmonds. “It affects the first-time Buyers mostly. It starts a chain reaction through the market.”
The small incremental increases are essentially following the lead of the Americans.
“That’s going to have the greatest impact on the market this year,” Simmonds pointed out.
Having been in the real estate business for 17 years, Simmonds has seen it all. But these times should prove to be both interesting and challenging.
Chemainus remains among the many highly-desirable locations on the Island. There’s an abundance of people from the Lower Mainland, Alberta, Saskatchewan, Manitoba and Ontario ready to move here at a moment’s notice when the right house at the right price comes around.
Right now, there’s definitely a lack of listing inventory in the Chemainus area.
“I have all kinds of buyers set up, I would say 20 per cent local and 80 per cent from elsewhere,” noted Simmonds.
It still remains very much a seller’s market under those conditions.
“There’s not a lot available,” conceded Simmonds.
A development taking shape on Chapman Road is sure to attract plenty of attention because many are looking for rancher-style homes that are especially in short supply. “Those will sell like hotcakes,” Simmonds predicted.
On the horizon is a dramatic change in legislation against the way realtors conduct their business that takes affect March 15. Realtors will no longer be able to represent the buyer and the seller of a particular home.
“It is going to affect us enormously,” noted Simmonds. “I think the public’s going to push back really hard on it and I think they’re going to have to retract.”
Those are just the latest series of factors hitting the market amid peak periods for prices and demand locally.
“2017 was our best real estate market in the history of the Island, with multiple offers on a large portion of our listings,” pointed out Simmonds.
New mortgage rules that went into effect Jan. 1 were immediately seen to have a dampening effect on the market. The latest lending restrictions announced by the Office of the Superintendent of Financial Institutions mean even home buyers who don’t require mortgage insurance because they have a 20 per cent down payment will still have to prove they can meet their commitment if interest rates rise above the five-year Bank of Canada benchmark rate or 2 per cent higher than their contracted mortgage rate, whichever is higher.
“That will affect level entry people,” assessed Simmonds. “It has a chain reaction through the whole market.”
The large majority driving the market in Chemainus come from the 55+ age group.
“We’d love to have families here,” said Simmonds. “We don’t have enough high-paying jobs to attract them for the most part.”
But there are so many desirable aspects to Chemainus that Simmonds hears about all the time.
She has a promotional video on her website that really sells the town. “We’ve had some incredibly good changes,” Simmonds noted.
She points to things such as the Waterwheel Park and Willow Street improvements, the fact so many amenities are within walking distance, the attraction of the Chemainus Theatre Festival, the future development at the old Chemainus Elementary School site and the Municipality of North Cowichan’s plans for a walkway along the waterfront by 2020.
“There are so many reasons,” Simmonds indicated.
