Home sales drop 19 per cent in Niagara

While new mortgage-qualification rules have been cited as a reason for slumping home sales, Niagara Association of Realtors president Randy Mulder said Niagara’s wintry weather at the start of the year shoulders some of the blame, too.

Thursday, Canadian Real Estate Association reported a 14.5 per cent sales drop across the country in January, compared to the month earlier – the lowest monthly level in three years.

In Niagara, home sales dropped by 19 per cent compared to a month earlier, while in Toronto sales declined by 27 per cent, and by 32 per cent in Hamilton-Burlington.

The sales slump followed new mortgage-qualification rules that came into effect Jan. 1, requiring home buyers to qualify for interest rates that are two per cent higher than the rate negotiated on their mortgages.

Mulder, however, said he doesn’t expecting declining sales to be long term.

“I think everybody is sort of taking a bit of a wait and see,” Mulder said. “I think it will more adjust what people are buying in terms of their budget than whether they’re moving or not. What they can afford is a little less, doesn’t mean that they’re not going to continue shopping.”

But snow-covered homes likely had an impact on declining sales, too, he added.

“The fact that we’re experiencing winter weather this year ... tends to stall things a bit too,” Mulder said.

He said the frigid, snowy weather in January likely diminished the “excitement to go out and look at houses, or even the incentive to list your house when everybody has convinced themselves that their house looks so much better in the spring and summer than it does when it’s covered in snow.”

Mulder predicted that Niagara will still “see a strong 2018.”

“It’s just that everybody’s sitelines have to be adjusted in terms of affordability based on the new rules,” he said.

Meanwhile, he pointed out that Niagara real estate values continue to climb, closing in on prices in other centres.

“I think that a lot of our growth was catch up,” Mulder said, pointing out Niagara homes were selling for 10 per cent more in January compared to a year earlier, “which is great news.”

The CREA reported that average housing prices across Canada only increased by 2.3 per cent in that time frame.

“It’ll be interesting to see if it continues to be that strong (in Niagara). I don’t have a crystal ball, but I don’t foresee a big drawback in Niagara,” Mulder said. “I think our market price now is very fair when you look at where we are compared to those around us.”