I find that many of the people I speak with who are thinking about entering the housing market; or are thinking about when their children should move out and enter the housing market have very similar concerns:
People are concerned that houses are too expensive and there is a bubble that is about to burst, some people have felt this way for 6 or more years; and are still on the sidelines, just watching prices go up while paying down their landlords mortgage. I personally am still buying, and I actually am buying aggressively, trying to grab as many rental units as possible.
If Interest rates are going to go up, then that will effect home prices, bringing them down?
Possibly...interest rates do effect a monthly payment and a household's affordability, all the figures that I have reviewed and what I'm seeing with my own 2 eyes, is that rates are going up extremely slowly and less than inflation. Unemployment is low, Immigration is high, market rents are climbing strongly. Gasoline has been going up, but it is still the number one fuel choice for automobiles...people will pay what they can, if it buys them a larger home or if it buys a smaller home that is where the concessions made. Rates will change but in 2013 on average the GTA properties Appreciated over 5%, Some neighbourhoods did 10%. How much did interest rates rise?
When is the Bubble going to POP?
This is the GTA, we are the big players in the Canadian Real Estate market. When the US bubble burst some markets were decimated, other were able to weather the storm. Demand is very strong in the GTA, and we have more people than we have homes for, and we are getting more people everyday!!
If you have 11 minutes watch the Toronto Real Estate Board Market Analysis. I think our outlook for 2014 is pretty good, unless ofcourse you are on the sidelines waiting for the bubble to POP!