New year, new you? Maybe. New year, new home? Whether you've been looking around and slowly getting your current home ready for market, or you are a first time buyer, the housing landscape in Winnipeg, like anywhere, is dynamic and always changing. So… What’s happening, what can you expect, and how could changed mortgage requirements and proposed development fees affect you?
First time buyer?
Under the new rules a stress test will now be used for all home buyers with less than a 20 percent down payment.
That means borrowers must be able to qualify for their mortgage using a higher interest rate than they will actually be paying on their mortgage.
The advertised special offer rates for a five-year fixed rate mortgage at Canada’s big banks are around 2.5 per cent. However, the Bank of Canada-posted rate used in the stress test is 4.64 per cent based on the posted rate at the big banks.You’re not paying more, but you’re going to be able to buy less house.
Example… Earning $70,000 a year with enough saved for a five per cent down payment, and carrying $500 a month in non-mortgage monthly debt payments such as a car loan. Based on a five-year fixed-rate mortgage of 2.44 per cent, you could qualify for a loan that would allow you to buy a house worth about $370,000 under the old rules.
However, under the new stress test using 4.64 per cent, you could only afford to buy a home worth about $280,000. A big difference in the Winnipeg market. So your options… get more down payment, or buy a less expensive house.
First time seller and you’re moving up?
The average residential sale price rose three per cent year-over-year in 2016, from $281,022 to $288,500. Sales increased by six per cent between January and October in 2016 compared to 2015. Single-family detached homes between $200,000 and $350,000 are in highest demand, which most first time seller’s homes are between. One can notice the trends in the last 2 years, and the outlook for 2017 is expected to mirror the same in residential resales. So if you’re selling, it’s a positive outlook.
If you're buying as well?
Things also look good. Winnipeg is now sitting at what could be called a balanced market. So selling and buying a resale residential home? The timing is quite good.
A word on condominiums.
A diverse supply of both new and resale condos has fueled activity in Winnipeg’s condo market with sales increasing by 10% year over year in 2016. Retirees are typically attracted to resale condos located in Winnipeg’s surrounding area, while younger buyer’s drive the demand for new developments in the city’s downtown core.
I wish I could travel through time and tell you what this year will actually bring, but I can’t. What I will say is this: The feeling in the air right now is electric. The spring market seems to be waking up sooner than usual, and it’s shaping up to be one of best years for people like you; My clients and friends.
When you are ready to grab a cup of tea and chat more in depth about the market or your goals for 2017, I am here.