Over the last few weeks there have been many questions on the minds of both sellers and buyers here in the Vancouver area regarding the real estate market. One recurring theme is - how long - how long do I wait to begin looking for a new property and how do I cash in on record low interest rates. Is there a bottom ?
Recent activity has revealed a couple of key answers. First, most lenders are reporting such an increase in traffic they are cautioning the need for an extended period to process and approve financing terms and conditions. This is a result of many first time home buyers now entering the market thanks to the "too good to be true" interest rates and the ever so slight tightening by the lenders to ensure that clients are now in fact qualified and capable of the purchase.
The second item is not so much the reduction in available properties or "stock" as there are still great opportunites coming to market - but that those who have been waiting for the best interest rates are now concluding - this is it. With a bank rate of 0.5% can it really go any lower ?? And if it does will the reduction be passed on by the lending institutions.
Working with a client just last week on their purchase and completion - they reported that their monthly mortgage payment once all was said and done - is LESS than what they were paying for rent. You can review all the statistics you want or disect what is seemingly a steady stream of predictions, report's, expert opinion's, etc., but in this case - the numbers speak volumes. A mortgage payment LESS than rent.
All this to say if you do find yourself holding off on a home purchase based solely on waiting for the rates to reduce further - that may turn out to be a losing gamble. The current interest rate's and mortgage options are allowing a greater range of home buyer to enter the market - especially first time home buyers - and first time purchase benefits on such things as Property Transfer Tax, Government renovation initiatives, etc., are positive options. With more buyers hitting the market - you will not be alone in finding the right place and when the competition heats up - so will the propterty value.
Get ahead of the competition...