Quote:
Originally Posted by Potty
There are always first time buyers, but the recent dip in prices and low interest rates have brought out lots of people who have been sitting on the sidelines for the past couple of years, because they previously couldn't afford the place they wanted. Now that they can, they are buying in record numbers. If more first time homebuyers are buying now than at any time in the past decade, how is it sustainable?
Once this wave is over, first time homebuyers will still always be there, but not at the numbers we are seeing now. And though Calgary is growing, the housing market is over-built right now and it will take time for the excess inventory to work it's way through.
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All true, but the important issue is how much of the current oversupply gets sucked up by this big wave.
If they reduce the supply of first-time type homes and condos enough, then a decrease in first-time buyers down the road may also be equalled by a decrease in that type of supply and be sustainable.
In Vancouver, we are definitely seeing this in the major DT and urban areas. New developments have almost completely stopped and the combo of low prices/low rates is eating up whatever over-supply there was. This should bring balance back to the market as supply/demand are finally somewhat equal.
Calgary will always be different because of it's land, but I do think the current buying frenzy should take at least a decent chunk of the over-supply away and bring back some stability.