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MONTHLY MARKET UPDATE — NOVEMBER 2023 UPDATE
n November 2023 the real estate landscape in Victoria experienced a slight dip in benchmark values compared to the previous month, with condominiums averaging at $577,400, down from October's $585,600, and single-family homes at $1,286,400, a decrease from October's $1,305,900. Despite this, there were positive indicators as 2,644 active listings were available for sale on the Victoria Real Estate Board by the end of November, marking a 4.1% decline from October. Reflecting on the current interest rate climate, sales figures remain below long-term averages, yet the seasonal patterns within these figures align with typical trends for this time of year. Notably, there has been a commendable twenty-five per cent rise in the number of listings compared to the previous year, indicating a recovery from the prolonged period of limited inventory. This equilibrium in the market is providing prospective buyers with an increased array of options,
2481 BEACON AVENUE SIDNEY BC V8L1X9 | 1-877-656-0911 REACHUS@HOLMESREALTY.COM | WWW.HOLMESREALTY.COM When you buy or sell a home with Holmes Realty, a portion of the commission goes in support of local charities. Over $250,000 raised!
instilling greater confidence in those considering listing their homes. As we anticipate the usual seasonal lull in activity during winter, individuals contemplating a move in the upcoming year may find themselves in a more favorable position amidst this balanced market with increased inventory and ample choices.
On a more national level, as the real estate market continues to navigate the aftermath of the pandemic, financial institutions like BMO are closely monitoring the impending wave of mortgage renewals set to unfold over the next few years. With the bulk of BMO's mortgage portfolio up for renewal within the coming three years, borrowers should anticipate potential payment increases averaging up to 40%. In their recent fourth-quarter earnings call, BMO revealed that a modest 11% of its portfolio, valued at $16.2 billion, is due for
2481 BEACON AVENUE SIDNEY BC V8L1X9 | 1-877-656-0911 REACHUS@HOLMESREALTY.COM | WWW.HOLMESREALTY.COM When you buy or sell a home with Holmes Realty, a portion of the commission goes in support of local charities. Over $250,000 raised!
renewal in the next 12 months. However, a substantial portion is slated for renewal in 2025 ($27.6 billion) and 2026 ($55.8 billion).
For those who have already renewed their mortgages, BMO disclosed an average payment increase of 21% for fixed-rate borrowers and 22% for variable rate mortgage holders. While
these figures represent averages, variations exist among individual borrowers, with some experiencing smaller increments and others witnessing more significant payment spikes. Moreover, as individuals who secured historically low rates during the pandemic confront renewals in the forthcoming years, BMO forewarns of larger payment escalations on the horizon.
2481 BEACON AVENUE SIDNEY BC V8L1X9 | 1-877-656-0911 REACHUS@HOLMESREALTY.COM | WWW.HOLMESREALTY.COM When you buy or sell a home with Holmes Realty, a portion of the commission goes in support of local charities. Over $250,000 raised!
Despite these increases, BMO attests that borrowers have thus far demonstrated resilience in managing higher rates. According to BMO's insights, borrowers were stress-tested at higher rates during origination, and many have experienced income growth that offsets the heightened payments. Johannson, a BMO representative, expressed confidence in consumers' capacity to handle these increases, noting their adaptability and ability to afford the raised payments.
In projecting the future landscape, BMO's Chief Risk Officer, Piyush Agrawal, suggested that potential rate cuts could alleviate payment
2481 BEACON AVENUE SIDNEY BC V8L1X9 | 1-877-656-0911 REACHUS@HOLMESREALTY.COM | WWW.HOLMESREALTY.COM When you buy or sell a home with Holmes Realty, a portion of the commission goes in support of local charities. Over $250,000 raised!
shocks for renewals occurring in 2026. He anticipates that by this time, interest rates will likely have moderated, giving customers sufficient time to prepare for the transition. In terms of delinquency rates, BMO reported a low 90+ day mortgage delinquency rate of 0.14% of its portfolio, consistent with the previous quarter and slightly elevated from 0.11% a year ago. Additionally, BMO disclosed that approximately 62% of its variable-rate mortgage portfolio, valued at $29.8 billion, is currently experiencing negative amortization. This situation, unique to fixed-payment variable rate mortgage products offered by BMO, CIBC, and TD, implies that monthly payments are insufficient to cover the total interest cost, consequently adding to the
2481 BEACON AVENUE SIDNEY BC V8L1X9 | 1-877-656-0911 REACHUS@HOLMESREALTY.COM | WWW.HOLMESREALTY.COM When you buy or sell a home with Holmes Realty, a portion of the commission goes in support of local charities. Over $250,000 raised!
principal balance. It's worth noting that while RBC offers fixed-payment variable rate mortgages, it does not permit its mortgages to amortize negatively. This comprehensive overview from BMO offers valuable insights into the impending changes within the mortgage landscape, encouraging borrowers to prepare for potential payment adjustments while highlighting the institution's confidence in consumers' ability to adapt to these fluctuations. If your mortgage is coming up for renewal don’t wait till the last minute, call your bank or mortgage broker well in advance of its maturity date to secure your best option.
2481 BEACON AVENUE SIDNEY BC V8L1X9 | 1-877-656-0911 REACHUS@HOLMESREALTY.COM | WWW.HOLMESREALTY.COM When you buy or sell a home with Holmes Realty, a portion of the commission goes in support of local charities. Over $250,000 raised!