Market Correction Expected: Canadian Homes keep Expensive




Basic

Every mortgage broker and consultant in Vancouver looks on with interest as entry-level house prices keep disruptively high. Between the years 2008 and 2013, Canadian houses prices rose by 25%. The buy of a home in Canada will now set you back on average $400,000. In Vancouver house prices have basically doubled in the last ten to twelve years.

What Goes Up…

shared sense concedes that house prices cannot rise indefinitely. At the moment, some housing markets in Canada are holding up better than others. Cities such as Montreal, Winnipeg and Regina have experienced drops in house prices. After a period of uncommon gains there will always be a period of weaker performance. This is true of any financial asset. Your mortgage broker and consultant in Vancouver can better advise you on the character of the market.

The government took a hands-off approach last months when BMO dropped its interest rates. It is expected that interest rates will rise later in the year and that there will be some kind of correction in the market. Despite speculations that the market is softening, the spring housing season remains strong. The average house price has risen in the last year by 6%.

First-time Buyers

For first time buyers, high prices make it very difficult to get on the character ladder. In Vancouver and Toronto, there is nevertheless not enough supply to meet need. without of single family homes is leading to bidding wars between buyers which is in turn driving up prices already higher. When a bidding war ensues and a house leaps $80,000 beyond the asking price, it can be very disheartening for buyers. According to a report issued by the BMO, 60% of Canadian first-time buyers are putting off purchasing a house. High prices and stricter mortgage regulations are seen as the dominant reasons for delaying buy.

Correction

Some fear that a sudden correction in the market might have a substantial impact on the overall economy, with some of the more extreme forecasters already predicting a recession. When house prices are high, household wealth rises, as does the ability to borrow. Consumer confidence is buoyed. But a contraction in the market would reverse some of these trends and expose Canada’s growing household dept. In times like these, your mortgage broker and consultant in Vancouver can be a real asset.

If you require financial advice, a mortgage broker and consultant in Vancouver can estimate your situation and work with you to create a plan. Perhaps you are a first time buyer trying to get on the housing ladder. Perhaps you are preparing to revive your mortgage and are worried about your personal dept. Find a mortgage broker and consultant in Vancouver who can clarify your position and provide leverage to pursue your interests.




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