According to the latest reports, Canada’s housing market is slowing down. However unlike the tragedy that hit the U.S. market with the subprime mortgage crisis that begun in 2008, Canada’s market decline is much less catastrophic.
In Vancouver however, some are worried that the condo market may take a big hit. There are a number of unoccupied condos. But despite low interest rates, high prices and large amounts of household debts, most real estate experts and Vancouver realtors aren’t that concerned.
Realtors Vancouver remains confident that despite the pricey real estate, Vancouver is not the hub of a real estate bubble. If anything, some suggest it might be more like a balloon, which could slowly release air and deflate rather than bust.
In the last decade Vancouver housing prices have risen 159% compared to the 104% on the national front. The ration of price to income is also nearly ten which is close to double what it was ten years ago. Victoria and Toronto also have high rates here, with Victoria at a ratio of 5.7 and Toronto at 6.7.
Though the rising home prices might worry some, most experts remain certain that the growth doesn’t seem to be too fast or excessive. However, in the event of an interest rate hike things could become a little worse.
If interest rates were to go up by three or four percent than the real estate market would certainly feel it. Homes would be much less affordable.
An interest rate hike or a full scale recession would certainly offer a correction to the market. But most Vancouver realtors feel that this is unlikely.
While in British Columbia the real estate market is cooling off, this is happening slowly and might not even be really felt at all this year. The prices are slowly declining and Vancouver in particular is noticing fewer sales of high end homes, but this is more a leveling off than anything else.
Homes for sale Vancouver and condos for sale Vancouver may therefore become slightly more affordable, which is good news for those in the market to buy.
Banking regulators are somewhat fearful however about the more liberal approach to mortgages that some Canadian banks are engaged in – see Summit Mortgage for more details. Others however say that Canada is nowhere near where the U.S. was in terms of lending regulations.