Quote:
Originally Posted by chemgear
Maybe I'm mistaken, but I would have thought really cheap borrowing costs would spur better demand than "normal" historical levels.
Compounding that, I would also assume that there would be more transactions and demand given the growth of the city over the last 10+ years; everything being equal of course. The city has grown what? 20-30% over that period?
|
A big factor in real estate is people's expectations. If everyone thinks house prices are going to keep going up like crazy, they'll buy as much real estate as they can, and it becomes a self-fulfilling prophecy.
On the other hand, if people have just experienced a crash (locally and by analogy in the US) they're less likely to feel a sense of urgency about buying property. This allows for a more measured market, which is probably a good thing.
Interest rate expectations also matter. If you can afford a house at current rates, but expect them to rise (as has been widely predicted by gov't and banks in the media) you would reasonably base your decision making process on the higher rates.