MEDICINE HAT – 2017 saw an increase in the sale of homes in Medicine Hat for the first time since 2014.
According to the Medicine Hat Real Estate Board, there were 1,443 MLS sales up to December 31st, 2017. That’s up from 1,342 in 2016.
“2017 was a good year, we were probably up about 10 per cent in sales overall,” said MHREB president Tim Seitz. “We were encouraged by that after a slow 2016.”
Sales of homes have been declining since 2014, mirroring what was happening with the economy and the recession due to the fall in commodity prices.
“We haven’t had great years since 2008, but 2014 was an up year,” Seitz said.
There were 1,708 houses sold in 2014, that number dropped to 1,423 in 2015.
While 2017 may have seen sales increase slightly over 2015, the value of those sales was around $9 million lower.
The MHREB said the drop in value may be linked to the government introducing stricter mortgage rules which took effect January 1st, 2018.
The federal rules increase the threshold home buyers must reach to qualify for their mortgages.
Even those who put down 20 per cent or more of the home's value have to submit to a ‘stress test’ to ensure they can afford the payments if the Bank of Canada hikes interest rates.
Prospective homeowners have to prove they can keep up with payments at the BOC’s five-year average rate, or two percentage points higher than their lender’s rate.
“It seems like in these last few months we’ve had [more sales] of the lower priced homes, maybe some of the entry level people that are buying their first home,” explained Seitz.
“I think they got scared a little bit and wanted to get in before the mortgage rules changed too much.”
Seitz said the MHREB hopes to see the positive sales trend continue into 2018 and it will be interesting to see how the new mortgage rules affect the sale of homes here in Medicine Hat.
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