Valley realtors hear reassuring words from U.S. expert
The founder and chairman of the board of Re/Max International had nothing but praise for the Canadian government and its lending policies on Monday.
Dave Liniger from Colorado also had reassuring words for 100-plus realtors at a broker, owner and manager retreat in Kelowna hosted by Re/Max Western Canada, despite dismal news on housing starts from Canada Mortgage and Housing Corp. the same day.
â€œCanada is much more fortunate than we are,â€ Liniger told The Daily Courier in an interview. â€œYouâ€˜ve got some sanity in your government, a lot of common sense, and some good government regulations in your mortgage lending market that, unfortunately, we threw away for a few years. It will never happen again in our lifetime, I promise you.
â€œYour foreclosure rate is minuscule compared to what weâ€˜re finding. Basically, the problem you are having in Canada in residential real estate is your market was just overheated.â€
On Monday, CMHC reported that housing starts in Kelowna fell 90 per cent in May, from 397 in May 2008 to 38. Penticton was down 79 per cent, 43 to nine, and Vernon was down 56 per cent, 48 to 21.
â€œDemand for new homes has since cooled off in response to strong price competition from a well-supplied existing home market,â€ CMHC analyst Paul Fabri said.
Liniger said the statistics arenâ€˜t a cause for concern.
â€œDespite what the realtors think here, youâ€˜re having a moderate and a very light correction that will probably last for maybe another six months or a year, depending on what happens with your employment,â€ he said.
â€œBut, for the most part, this should be a welcome correction so that you donâ€˜t get so superheated like we did in the U.S.â€
U.S. owner-brokers have learned a lot from their Canadian counterparts, he admitted.
â€œYou had adjustable-rate mortgages and short-term mortgages 20 years before the U.S. did. And so we have learned an awful lot from Canadians and our Canadian operation for Re/Max.â€
CMHC also said Kelowna starts were down 91 per cent (1,631 to 138) for the first five months of the year compared to 2008.
Nationally, starts increased to 126,400 units in May from 117,600 in April while in B.C., they slipped to 9,400 from 9,900 due to volatility in the multi-family sector.