Douglas Todd wrote in the Vancouver Sun about a UBC study by Patrick Condon, Thomas Kroeker and David Ley. Looking at 50 large North American cities over six decades, they found Vancouver built new housing faster than almost anywhere and still lost affordability fastest. Their explanation is investment money, local and foreign, chasing land. Condon summed it up as “it’s all about the dirt.” Other economists disagree, and the argument isn’t settled.
I’m a mortgage broker, not an economist, so I won’t pick a side. What I can tell you is what an investor pullback looks like from my desk in Surrey, because we’re in one.
Where the investors were
Greater Vancouver’s realtor board says apartment sales were down about 19 per cent from last September, while detached and townhouse sales were slightly up. Their economist read that as end users carrying the market while investors wait.
In the Fraser Valley the condo benchmark is down about 9 per cent in a year. In North Surrey, around King George and Surrey Central, it’s just under $400,000. Presales, which used to be bought by investors in volume, have slowed right down.
If you’re buying to live in
This is the best footing a first-time buyer in Surrey has had in years. You’re not bidding against someone who wants five units for rental income. You have time to read the strata documents and ask questions.
A few things lenders look at closely on condos right now:
- Size and type. Some lenders limit financing on very small units or studios. A unit built for short-term rental or students may have fewer lenders interested.
- The strata. Depreciation report, contingency fund, insurance deductible, any special levy coming. I want those before you remove subjects, not after.
- The rental mix. A building that’s mostly tenants isn’t a problem by itself, but it can narrow your lender options.
If you bought a presale in 2022 or 2023
This is the call I’m taking most. You signed at peak prices, the building is finishing, and the appraisal at completion comes in below your contract price. The lender advances on the lower number and you owe the gap on closing day.
Don’t wait for the completion notice. Ask me now to estimate where the unit is likely to appraise, using resales in the same area. If there’s a shortfall, we can plan for it: more down payment, a different lender, or in some cases a short private second mortgage to close, with a plan to refinance it out.
Whichever side of this you’re on, buying fresh or closing on an older contract, call me early. Early is cheaper.
