Take advantage of a down market
THE BC MARKET TODAY
In February, CREA said sales were down 15.8 percent compared with a year ago — a decline that was exaggerated slightly by an extra day in February 2012. Sales were down 2.1 per cent month-to-month in February — reversing a small gain in January.
Klump noted the decline from early 2012 reflects reduced demand due to tighter mortgage rules brought in by the federal government last July (Source).
So where is the silver lining?
Buyers can get a good deal as all the data points to it still being a buyers' market, especially in Vancouver. “Location is key, and Vancouver (or B.C. generally) is the weak neighbourhood with buyers firmly in control,” Kavcic wrote in a report (source).
- Ask. With excess inventory in the multi-family industry, "the volume of projects under construction crept up at a measured pace and new project proposals surged during the quarter" (source). With a surplus of product, you will likely have some wiggle room when purchasing a new home.
- Mortgage rates are staying low – “Bank of Canada maintains overnight rate target at 1 per cent” (source), this means you can borrow at low rates and this should continue to be the case for a while.
- Shop around. A buyers market means you can take the time you need to find the home that best suits your needs.
First time homebuyers are in an excellent place to purchase a home right now. With incentive programs in place like the First Time Home Buyers’ Program.
What are the benefits of owning your own home?
- Home ownership is the single largest source of savings for Canadian households.
- Your payments build equity (as opposed to renting, where your money goes to the building owner).
- Unlike other investments that can be volatile, when you buy a home the increase in its value is relatively steady. The average price of a house for sale on the Canadian real estate market has increased every year since 1998.
- The return on investment for a house can be substantial. In Canada, there has not been a recorded 10-year period where average house prices have not increased.
- Homeowners can use the equity in their homes as security for other loans.
- Buying a home and building equity is the first step on the property ladder. It gets you into the housing market, keeps you in touch with increasing house prices, and puts you in a good position to trade up to bigger and better homes as your circumstances allow (source).
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