The Greater Vancouver Housing Market is expected to grow by 2 per cent in 2012. In 2012 the market will stabilize and show modest growth in the eline with inflation.
According to the chief economist of CIBC, Benjamin Tal. "The housing market of tomorrow will not be as exciting as the housing market of yesterday,” he said in an interview
As long as interest rates remain relatively low and sub prime mortgages kept at bay, the most likely scenario is that the market will plateau.
The CMHC and CREA both predict the a increase in value from 2% to 3% in Greater Vancouver.
How will a more relaxed real estate market affect new home buyers, investors and renovators in 2012?
First-time home buyers
Affordability and interest rates will be the major concerns in 2012. Prices will continue to be near 2011 rates, especially in urban centres like Vancouver, since interest rates are likely to remain low for the time being.
But rates won't stay low forever, which is why you should estimate mortgage payments based on interest rates that are 2 or 3 percentage points higher than current interest rates, and if you cannot afford that, get a smaller mortgage and buy a less expensive house.
Expect an end to bidding wars. New home buyers will have the luxury of time in terms of looking at properties without being rushed into decisions. That’s the positive.
Investors and flippers
If you’re in it to flip it – meaning you buy a home hoping the price will rise by just doing minimal changes – those days are over.
- Rental Investors still have a great opportunity. With mortgage rates low and vacancy rates at a record low over the last decade, The right investment can put you in the black in the first month.
The cost of renovations will not increase significantly so long as interest rates remain at their current level, so it’s a good idea to take advantage of this time to finance these projects.
For those looking to take on a second mortgage, remember to make sure you’re equipped to finance them if interest rates creep up.
Variable-rate mortgages are still a good option for those who are able to withstand fluctuations in the market and "ride the ups and downs without getting a stomach ache."
The best advice I can give to any Buyer, Seller or Investor is to speak with a Real Estate Professional who knows your market specifically and all the details involved in your future transaction.
Contact us for your Real Estate Needs.
THE AZIZ GROUP