As expectations of interest rates rising become reality, more and more first-time home buyers are rushing to buy now instead of later. Re/Max report released on Tuesday shows that real estate market is being driven by first-time home buyers.
Another interesting thing that the report shows is that the new mortgage rules that came into effect last month are not turning away buyers from the market, but in fact the buyers are down grading their ownership expectations in the pursuit of being a home owner.
“Re/Max said that, so far this year, home sales are up from where they were at the same time in 2010 in about 30 per cent of Canada’s main markets, with prices rising in 70 per cent of markets.
The Vancouver region is particularly strong, with sales up about 12 per cent and prices rising 20 per cent.”
The other interesting report from TD Bank released on Monday, is saying that BC economy is slowing down over the next 2 years.
One of the points was, “Weakness is expected to come from a reduction in regional housing market activity and relatively slower growth in a number of core industries, including construction and tourism …
The housing market will see slower activity over the next two years with interest rates poised to rise this summer. Changes in mortgage eligibility rules will also have an impact”
The other concern is this decrease in demand will also reduce the prices. The bank predicted 1% this year and 2% next year price drop.
While the two reports cover different points, they do address the same issue of rising interest rates and possible effects on the real estate market in the near future.
Source: 1. VancouverSun 2. TheProvince