Housing starts declined in BC. A decline of 9.8% from August to September was recorded by Statistics Canada. This number is deceiving since the current level of housing starts are at near all time high.
It is signaling a slow down in the BC economy. One of the chief benefits of a cooling housing sector is that prices will moderate. The BC housing market has been criticized for becoming unaffordable. A slow down in activity and the consequent moderate will ensure a vibrant market and keep housing prices in real.
The net effect of the higher prices in BC will be the adoption of longer term mortgages. The 35 and 40 year amortization mortgages will be adopted by mortgage buyers to keep mortgage payments affordable.
Affordability will be key to keeping the housing market vibrant. As American investors retreat due to the higher Canadian dollar and more attractive buys in the US, it will be important to ensure that the local buyers can afford to remain in the market to pick up the slack.
One market segment that could assist in keeping the housing market is the clients who do not fit inside the conventional lender matrix. Clients who have had past credit difficulty in either through debt consolidations or poor credit can obtain highly competitive mortgages. The numbers of these potential buyers are in the thousands. The represent a potential pool of buyers that could be tapped to ensure the housing market remains vibrant.
Duncan Seward is a mortgage broker in BC who specializes in the alternative mortgage market. He is an advocate for people who have been turned down by conventional lenders for second mortgages in BC and mortgage loan refinance and debt consolidation in BC.
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