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House prices maintain upward trend, says BCNREB

The average price for a single family home remains on the rise in Prince George, according to the latest B.C. Northern Real Estate Board numbers. Year-to-date, they've been selling for $356,478, up $39,129 or 12.
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The average price for a single family home remains on the rise in Prince George, according to the latest B.C. Northern Real Estate Board numbers.

Year-to-date, they've been selling for $356,478, up $39,129 or 12.3 per cent over the same period last year. However, at 453, the number of sales is down by 62 homes or 12 per cent.

As a consequence, total revenue stood at $161.5 million, down a slight 1.3 per cent.

"We're noticing that prime properties are going for high prices because the prices are way up," said Bob Quinlan, a Prince George real estate agent. "But if people don't get the house they want, they don't necessarily jump on the next house. They're sitting back and waiting for the right house to come along and when it does, they pay the price for it."

As well, he said tougher mortgage qualification rules have put a squeeze on the number of people who can shop for a home.

As of January 1, even those who can pony up a 20-per-cent down payment - the minimum required to avoid paying a premium for mortgage insurance - have had to show the wherewithal to afford the greater of two percentage points above the contractual mortgage rate or the five-year benchmark rate published by the Bank of Canada.

On Wednesday, the Bank of Canada raised its target for the overnight rate a quarter-point to 1.5 per cent Wednesday and all of Canada's Big Six banks said they will raise their prime lending rate to 3.7 per cent - also a quarter-point hike - effective Thursday.

Quinlan said he doubts they will go much higher for the time being due to uncertainty over Canada-U.S. trade relations.

"A lot of it depends on what's going to happen with NAFTA," he said. "If things get a little bit shaky, I can see interest rates going down to protect the market but if things get really shaky, I can see connections being cut and therefore lenders and borrowers have less options and rates will move higher."

Looking at the city region by region, the southwest led the way in activity as 148 single family homes sold for a median price of $425,000 so far this year.

North of the Nechako, 84 homes have sold with a median price of $357,500, while in the west, 132 have sold with a median price of $315,000, and east of the bypass, 84 have sold with a median price of $251,865.

For properties of all types, 691 worth $216 million have changed hands, compared with 817 properties worth $234.9 million in the first six months of last year.

On the house construction front, there have been starts on 82 single-family homes year-to-date, according to Canada Mortgage and Housing Corporation, up from 70 by the same point last year.

Completions on single-family homes stood at 65, well up from 27 by the same point last year. Likewise, 153 units of apartment dwelling have been completed, way up from just seven over the first half of 2017.

New single-family homes sold for $466,238 on average in June.

Canadian Homebuilders Association - Northern B.C. past president Jody Tindall said the upward pressure on resale prices is helping to buoy the new home market.

"Cost pressures are making new homes more and more costly so builders do need this upward pressure on used inventory to help buyers afford the new home they have been working towards," she said. "Home builders are concerned about the current state of costs, interest rates, and the wider market forces so I would expect most will continue to move very cautiously in the spec part of the market."

- with files from Canadian Press