“That’s a big deal for a lot of buyers,” Elmenhoff said.
Gregory Klump, the chief economist with the Canadian Real Estate Association, which represents about 100 boards across the country, said it’s too early to tell if the warmer weather has had an impact on the market. But, he says, historically people wait until the spring to list their homes.
“You know you can extract maximum money in spring because that’s when demand goes bananas,” said Klump, adding that the changes to the mortgage rules were expected to push activity forward, but a lack of supply has crimped sales.
“The supply and demand imbalance has resulted in large price increases,” he said.
The Real Estate Board of Greater Vancouver reported Tuesday that January sales were up 31.7 per cent from a year earlier and 46 per cent above the 10-year average for the month. The benchmark price for a detached home in the region was up 27.9 per cent from a year ago, to $1,293,700.
Toronto’s numbers are expected to be released Wednesday, and there is no indication January sales figures will show any type of slowdown.
Meridian said it jumped the gun on lowering rates — last year it offered a 1.49 per cent rate on an 18-month contract — after witnessing a robust market for housing in January.
“We’re building our awareness and growing aggressively in Ontario and this is another way of getting our name out there,” said Bill Whyte, chief member services officer for Meridian, who speculated warmer weather has probably helped the market. “We are also seeing the mortgage market (as) more of a year round thing.”
Meridian is trying to get an edge on banking competitors who have been raising rates even as some long-term bond yields drop. The credit union issued a challenge to those banks.
“Meridian is going against the trend set by banks and lenders of raising their fixed mortgage rates,” Whyte said. “We are able to take advantage of the current bond and lending environment.”
Rob McLister, founder of ratespy.com, doesn’t expect the banks to start lowering rates anytime soon, as the wider spreads increase profitability with sales down in some markets like Calgary.
“Banks are doing everything in their power to keep margins inflated. They know rates are going down,” said McLister, adding the banks are also trying to cover costs being passed on by other government changes that included increases to securitization fees and higher capital requirements.