Local real estate market continues upswing
The local real estate continue to track upwards, with local industry officials downplaying worries that a rise in borrowing costs may dampen it.
“We’ve had a really active market and it’s healthy in that we have new listings replacing what’s been sold,” said Brooklyn Kalista, the president of the Medicine Hat Real Estate Board.
“We’re not flooding the market on either side and despite the obvious sleight rise in interest rates, that were recently posted, it doesn’t seem to have damaged consumer confidence.”
The Bank of Canada raised its prime rate by a quarter point on July 12, marking the first time in seven years rates went up, after falling to historic lows, then settling there after 2010.
The well-telegraphed move, however, didn’t seem to put off home buyers in Medicine Hat over June or July, figures show.
For July, 96 single-family homes changed hands for a total of $30.6 million — a near 10 per cent increase on both volume and value over July 2016.
Similarly, a strong month for sales of condos and other residential units has the class on reaching its highest totals since a boom year of 2014.
That category saw just 40 units change hands for a combined value just more than $9 million. For 2017, the volume is up 25 per cent on 10 per cent more activity (sales).
In the recent month, almost entirely residential sales, puts overall total market sales to $247.1 million for the year. That’s a 10 per cent bump from the same point in 2016, equal to the 2015 figure, but 20 per cent behind 2014 totals at seven months.
Considering nearly 600 transactions since January 1, the average sales price of a detached home sold in 2017 is $306,400.
The effect of higher interest rates may not show up for several months. Most mortgage pre-approvals are valid in a window of 30 to 90 days with a locked-in rate offer.
Sales could also reflect a rush by buyers to take advantage of low rates before they increase.
However, Kalista felt that such an effect might be muted considering that rates have sat so low for so long, and are only expected to rise gradually.
“Sometimes you’ll see some (prospective) buyers really halt the brakes,” said Kalista of changing market factors, like bank rates. “We haven’t seen that.”