Still reeling from the oil and gas sector’s plummet, Calgary has shown signs of recovery, however, that’s now in jeopardy.
Calgary’s real estate market is flat with an overabundance of condos still listed and buyers having trouble securing mortgages. Croft Axsen, owner of DLC Jencor Mortgage Corporation, says refinances, in particular, have become difficult to obtain.
“The market here is flat and quiet,” he said. “Refinances are difficult because of the flat prices and the government regulations have restricted activities so much; purchases are flat because of the economy. We don’t have the migration that Toronto and Vancouver do, so sales have been flat for the last little while.”
Axsen’s analysis is in line with what many brokers have told Mortgagebrokernews.ca: B-20, intended as a panacea for overheating in Toronto and Vancouver, has been a paroxysm everywhere else in the country.
“Refinances are not insurable, so all of the monolines are out of that market and there’s less competition because of government interference in the marketplace,” said Axsen. “It’s a significantly smaller market than it used to be, which I assume is the government’s purpose, but I’m not sure restricting liquidity in Calgary is necessary at this time, but I understand their concerns about Vancouver and Toronto. Unfortunately, they want to use a sledgehammer instead of a needlepoint to fix what they’re concerned about.”
He has noticed an uptick in people forced to sell their homes because of an inability to get refinanced, as well as ‘move-up’ buyers with children on the way being stuck in their insufficiently-sized condos.
“For many of them they don’t understand, because they’ve been able to get mortgages their entire lives, but now they’re being told they can’t.”
Julie Jeffery, a broker with DLC Elevation Mortgage, says realtor and consumer confidence is low.
“They’re really, really nervous,” she said. “When people get nervous, they shut down and don’t move ahead with their decisions to buy houses.”
Gone are the days when seemingly everybody bought a new home every three to five years. Now move-up buyers are stuck in their condos, and with condos planned before the economy crashed coming to market, there’s too much supply.
“They list to sell, but are unable to sell,” said Jeffery. “It’s really sort of squashing that market where those condo buyers would be moving up into a townhouse or single-family home, so there are not a lot of sales in the condo market.”
Although sales have hit a nadir, demand for brokers’ expertise is up. While it might provide fleeting comfort, the industry doesn’t appear imperiled—at least for the time being.
“We’re experts in the world of mortgages,” said Jeffery. “As much as there’s been a lot of concern, and as much as I don’t want to see more regulation, the positive I see is that more and more clients are saying, ‘My realtor said you’re an expert and you can help me get a mortgage.’ That at least makes me happy for our industry.”