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NEWS photo Cindy Goodman

THE SNOW-capped Lions ioom large over a freighter being foaded with grain.
Winter snow on the North Shore peaks make for appealing scenery and great:
skiing — —two attractions that contribute to Vancouver’ 'S growing tourism trade.

- Affordability rides
roller coaster rates

"ROLLER COASTER-LIKE
“movements in mortgage rates °

made. affordability highly

“s volatile’ in. the fi rst half of
© 1994.00

Record low mortgage rates

--in the. first quarter. helped
,,boost ” affordability to the
“ highest level in years. .

However, ‘since »March,
average three-year rates have

| jumped nearly 4 percentage

points, from a low of 6.5% to

“sa high of 10.375%.by the end
: ‘of June. This .is the fastest

four-month increase in the
three. year rate since it was

»- widely introduced in 1980.

‘As a result of this sharp
rise in mortgage rates, most of

. the’ affordability gains made
“in the ‘last: four years have
‘been lost in the four months

between March and June.

: For all major centres com-.

bined, © the percentage. of

“ renters who could buy peaked
-.at 41.3% in January, .1994

when the ‘average three-year
tate fell to 6.5%, By the ‘end
of June, the. proportion of
potential. buyers among

-“ renters had fallen to 26.6% as

the three-year rate rose to

“10.375%.
. However, despite the surge‘

in. mortgage rates, first-time
buying boomed .in the first
half of 1994 as buyers rushed

_ into the market before rates

could climb higher still. In the
first half of |1994, approvals
under. CMHC’s First Home
Loan. Insurance (FHLE), or

* Five Per Cent Down program,
‘were up 68% over the same

period last year.
‘A ‘significant. part of this
buying spurt was due to ‘rate

~ watchers" jumping in the mar-

ket as moitgage rates began to

+; increase. As the mortgage rate
roller coaster began to climb |

in’ March, a record 15,500

FHLI approvals were made. .

However, the growth of first-

«time buying did slow as rales °

Tose,:

“In February 1994, there.

were over twice as many
FHLI. approvals than in
- February 1993. By June 1994,

-, buying was still up, but surg-

ing mortgage rates ‘had
reduced the growth of FHLI
participants to only 30% over
the previous June.
Another indicator of
_affordability, the share of sin-
gie-detached homes bought
” by first-time buyers, remained
fairly stable over the first two

. Quarters of 1994,

However, the full effect of
the increasing rates on sales
will not be felt until the sec-

_ ond half of the year. One rea-
son for the delay is the use of
pre-approved mortgages,
which protect buyers from ris-
ing rates while looking for a
home. Pre-approvals allowed
loans negotiated at the lower
rates of previous months be
translated into sales a few
months later.

The effects of climbing
Tates On mortgage costs vary
across Canadian markets. In
higher priced centres, where
mortgages ure larger, the rates
will have a greater impact on
financing costs.

In Vancouver, for example,
the monthly. payment on a
mortgage of $177,116 (which
corresponds to the average

Starter) home price — of
$193,495) jumped $443, from
$1,186 early in March to
$1,629 by the end of June.
Over the same period, in
Montreal, the monthly . pay-
ment for a $94.916 mortgage
($102,890 house price) rose
-$237, from $636 to $873.

In Toronto and other
Southern Ontario centres, it
would tuke big rate hikes to

‘wipe out the larger gains

made in affordability since
1990. This is because of the
significant price declines seen
in recent years. For instance,
if mortgage rates hit 13.4% —
the highest annual average
three-year rate since 1982 and
all other factors remained
constant, almost twice as
many Toronto renters (12.5%)
could afford to buy an average

priced starter home now than ©

in 1989. In that year, just over

6% of renters could afford the :

average priced starter home of
$197,700. The Toronto starter
home price has since dropped
to $168.350 in the first half of

» 1994,

fn October, metropolitan
Vancouver had 1,713 housing
starts which was 3% lower
than in October, 1993 when
1,769 units were started,
according to Canada
Mortgage and ~ Housing
Corporation (CMHC).

The October level is also
down 11% from September
when 1.926 units were start-
ed. “With the exception of
apartinent condominiums,
starts of all housing types are
down slightly,” said Don
Renaud, Senior Market
Analyst. with CMHC: in

Vancouver, “Apartments: are

the most popular with. first

time buyers, and builders are:

continuing to target their con-
struction to this market,” he

added.

Housing starts’ in the
January. to October ; period
were 3% lower than the same
period of 1993. Housing starts
in October were highest in
Surrey municipality: for the
month of October. ‘

ey

Vozing
28

Lees = -

=
ell. San. 0
Tie ne SE

: eae
S251 50s ee
|

“1 Bedroom & Den from $186,500
2 Bedrooms from $221,500 _

Price includes 7 top of the line appliances, glass block, ceramic tile, gas fireplace, all
vertical blinds, security gated parking, video monitored lobby cntrance.

2 GORGEOUS PENTHOUSES ALSO AVAILABLE

For more information call: -
HOMELIFE BAY CITY REALTY INC.
— 986-4371
Open daily 1:00-5:00pm
Saturday 10:00-5:00.

“MOVE-IN” CONDITION:
* Start the year oif right!
« Spacious one bedroom condo
*:

Clean as a whistle ©
¢ Well managed + updated building ..
& * Quiet street - walk to ‘Seabus + uay'
** Try your offer **

ROB LEBLOND 986-4371

FOUR BR. - $439,900
No misprint here - this large, custom quality
home, on a full size, level lot, is our best buy!
Close to all amenities - please cail for finishing
ea financing details. Soren Frederiksen

BUILDER LIQUIDATES!

% Last few cul-de-sac homes, 4 bdrm up, den,
wide open family areas plus great bsmt. poten-

>& tial. Full size tot - biow out prices. Be uick to Bs;

call Soren Frederiksen.

*

* WV QUALITY - NV PRICE

¥¢The gem of Grand Boulevard! Set on an
impressive comer lot, this large 4 bdrm home

* ctters wide open plan, fully finished daylight

* “bsmt", very high quality througtiout. PS: Nice

city views! Soren Frederiksen,

*

BAY CITY REALTY INC.
986

Offering a
Convenient
Lifestyle,
Panoramic Views
& Superior
Security all in’
North Vancouver’s
Most Central
Location.

+,
“

HHH HHH HHH HHH HH HHH

EILEEN

Meri reaitensnss

NEW YEAR: NEW HOME
High quality new home on a new family cul-
de-sac. Very unique custom design with ©

many special features & heritage kitchen with

island + hardwood floors, kingsize master :

bedroom w/deluxe ensuite, full size billiards *
room, daylight bsmt, etc... Bullder will tradal
ROB B LEBLOND 986-4371. i

i ;

“JUST LIKE A TOWNHOME,

But priced like a condo! This big 2 br, 2 bath

lllahee home offers vaulted ceilings, cozy gas
fireplace, insuite laundry...-bring your pets too!
Vacant - Must seil!l Soren n Frederiksen. —

MUST BE SOLD
GREAT LOCATION .
2 bedrooms, south West facing wrap wou
balcony. Walk to all amenities. Vendor bought. an
‘ . ,#203-1650 CHESTERFIELD
’ EILEEN HWANG 986-4371 >

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