PE Ledger

Increasing mortgage rates are cooling the summer housing market

PEI

Key takeaways: 

  • P.E.I. does not see a decline in house costs like some other markets.
  • According to P.E.I.’s real estate company, while expenses haven’t come down, there are signs the market is beginning to cool barely this summer.

There are indications P.E.I.’s hot housing market is beginning to cool this summer as mortgage rates persist in rising. But at least so far, it hasn’t cooled enough to push prices down, like in several other Canadian markets. 

“We’ve seen a slow down in the heated market that we saw before in the spring,” said Kim Reddin, a mortgage agent in Charlottetown. “Not as many numerous offer conditions. Not as many over-ask situations … The pricing is stabilizing, I think.”

Canada’s two most important and costly markets — Toronto and Vancouver — had seen average house costs fall steadily since March, when the Bank of Canada began hiking interest rates. 

But according to the latest statistics from the P.E.I. While costs dropped barely through late winter and spring, Real Estate Association rallied in June, with the average sales price beating a record $416,000. That’s 25 percent higher than a year back. 

Also read: Seasonal businesses see a wave in tourists as summer gets underway

There are indications P.E.I.’s hot housing market is beginning to cool this summer as mortgage rates persist in rising. But at least so far, it hasn’t cooled enough to push prices down, like in several other Canadian markets

“I think it has to do with our average price still being more reasonable in P.E.I. compared to [larger markets],” said James Marjerrison, the company’s president. “You are still seeing that particularly in the starter home price … there are still a lot of customers in that price range” of the high $300,000s to low $400,000s.

More open homes, more days on market 

However, realtors are beginning to see signs of “a softening in demand,” he added. 

For one, while the number of new June listings was up over the last year, sales were down 12 percent. 

“And you are noticing more open houses happening, and perhaps the number of days a house is on the market rising a little bit,” said Marjerrison. 

Source – CBC News

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