Quote:
Originally Posted by pepper24
Huge bubble. When rates get back to historical averages.....pop! Calgary won't be too far behind.
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Disagree. There was a big drop in the last half of 2008, and since then it passed the mark before the drop and powered its way through to new highs.
There was a big push in the first three months of 2011 due to there being some uncertainty in the last month of 2010. Developers were still trying to figure out how to offer houses with the new HST rules and there were rumored big discounts from many companies coming in February. People held onto their money and then in February there was a huge buying spree. If you owned property on the west side of Vancouver, you could sell your house within a week for far above asking price.
People have been saying for decades that the Vancouver market will pop. There definitely have been drops in the market over the years, but the market is still trending upwards. One big reason for this is China has restricted the amount of property individuals are allowed to own. Since Vancouver is relatively close, has good trends, is nice to look at and has a huge Asian population, there will likely always be foreign investors and/or immigrants coming from there.
As for interest rates, they are higher or lower than late 2008 depending on what form you took. I took a variable line of credit at prime and was one of the last people in Canada given one of these. Most of these are offered at prime + 1% or in some cases prime + 0.5%. I bought in December 2008 and started at 3.50%. That dropped to as low as 2.25% from April 22 2009 - June 1, 2009. Now it's at 3%. Fixed rate mortgages were about 4.5-5.0% when I bought and I've seen five year rates as low as 3.25%. These are now around 3.7%.
In Vancouver, many houses are purchased for cash, so they are unaffected by the interest rates. There is always a ton of cash in the market and when prices are dropping, you'll see many purchases for people seeing long and medium term value. Until something upsets this trend, you'll see it continue to push prices upwards.
People can easily survive on a $200,000 salary in Vancouver. Even $100,000 is doing well. Obviously at those salaries you can't have a mansion, but there are still great properties available and you can always rent if you prefer.