Vancouver’s mortgage brokers and consultants watch with concern as the entry-level home prices continue to be disruptively high. The Canadian house prices increased by 25% between 2008 and 2013. On average, a Canadian home will cost $400,000. Vancouver’s house prices have almost doubled over the past ten to 12 years.
What goes up…
The common sense says that house prices can’t go up indefinitely. Some housing markets in Canada are doing better than others at the moment. In cities like Regina, Winnipeg, and Montreal, house prices have dropped. There will always be a time of low performance after a period with uncommon gains. This holds true for any financial asset. You can get better advice from your Vancouver mortgage broker or consultant about the market.
Last month, when BMO reduced its interest rates, the government was more passive than usual. It is likely that interest rates will rise in the second half of the year, and that the market will experience some correction. Despite speculations of a softening market, spring housing season is still strong. In the past year, the average house price rose by 6%.
First-time buyers
High prices make it difficult for first-time buyers to get onto the property ladder. There is not enough supply in Vancouver and Toronto to meet the demand. Bidding wars among buyers are a result of a shortage of single-family homes, which in turn drives up prices. Buyers can feel discouraged when a bidding war breaks out and the asking price of a house jumps to $80,000. A report by the BMO states that 60% of Canadian first-time homebuyers are delaying buying a house. The main reasons people delay buying a house are high prices and stricter mortgage regulations.
Correction
Many fear that an abrupt correction in the market could have a significant impact on the economy. Some forecasters even predict a recession. House prices rise, and so does household wealth. Consumer confidence is high. A contraction in the market could reverse some of these trends, and expose Canada’s growing household debt. Your Vancouver mortgage broker or consultant can be an asset in times like these.
A Vancouver mortgage broker or consultant can help you create a financial plan. Maybe you’re a first-time buyer looking to move up the housing ladder. Maybe you’re thinking about renewing your mortgage but are concerned about your personal finances. Locate a Vancouver mortgage broker or consultant who can help you clarify your situation and give you the leverage to pursue your interests.
Lending Experts, a Vancouver mortgage broker, offers a variety of financial services. They are part the Paragon Mortgage Group. Lending Experts can help you secure your mortgage loan no matter what the financial situation.
