Lower Mainland’s real estate market is always a hot topic. Currently, enthusiasts are questioning the future of the market given that the Bank of Canada seems to be holding interest rates steady. Surely, the bank's decision was expected by economists as the bank had communicated its plan to pause the rate hikes after implementing eight consecutive rate hikes from March of last year to February of this year. Speculations surrounding the ease of securing a mortgage and the lucrativeness of setting foot in the market continue to prevail in an ever-changing industry.
Real Estate Agent Gurbishan Khera explains that last year saw a quick turnaround in the real estate market with interest rates rising faster than expected, resulting in a slowdown in late summer and fall. This year, interest rates remained high, affecting the purchasing power of buyers, but there was pent-up demand from families and individuals who were in need of buying, like new parents and new couples and those upgrading to a new home. There was a shift with a decrease in property purchases as investments, and increased interest from individuals looking to occupy homes, townhomes, condos as personal residences. With the onset of spring, the market could once again change rapidly. Khera details, “Record-low inventories may entail more opportunity to sell as there are a lot of buyers. This may be a good time to sell with many buyers looking for a home in the near future, as they delayed the purchase in the fall and winter, but with caution for potential volatility.”
Real Estate Agent Sidra Subzwari’s assessment of the market is similar. She elaborates although last year’s market slowdown had created uncertainty for buyers, it more so discouraged sellers from placing their home on the market. Despite the interest rate increase, an appetite from qualified buyers remained apparent. Sales have actually slowed down due to the lack of inventory, which, in-turn, has created an active market again as of spring this year. Subzwari highlights, “If there are sellers wanting to explore the market, I would strongly encourage them to do so. Prices continue to hold strong, however it is best to understand the current market and align expectations accordingly.”
Adding further insight, Real Estate Agent Rahul Gill reveals that the real estate market has also experienced significant changes due to ongoing immigration and the lifting of restrictions on foreign buyers. Even those with work permits can now purchase homes. It is therefore anticipated that the market will continue to grow in the coming months and years. While interest rates are currently high, it is expected that they will come down in the future, leading to increased investment and buying activity.
“If the Bank of Canada does not raise rates further, the market will go crazy. The impact can already be seen as properties today are getting multiple offers. If you want to sell your home, now may be a good time to upgrade to a bigger or better property at a more affordable price. Similarly, buyers can take advantage of the current market conditions and purchase a home at a relatively lower price point. The key is to enter the market when prices are low, and then sell when the market rebounds and prices are high.”, Gill shares.
Shining light on the mortgage aspect, Mortgage Advisor Harvir Mann empathizes that getting approved for a mortgage may seem complicated. However, he reminds mortgage seekers that the marketplace now offers a range of mortgage lenders, creating demand for alternative lending products. Different types of products from different lenders may make it easier for borrowers to get approved. With the rise of the gig economy during the pandemic, many lenders have created more products and different methods to qualify applicants, making access to multiple lenders and products more important than ever.
“Whether your plan is to buy three months from now or a year from now, reach out to your bank or a licensed mortgage professional early on in the process, where we can walk through your goals and come up with a plan and budget. Credit is an important part of the approval, so managing your debts and minimizing any monthly expenses is key. A common one we see is car payments; a $500 monthly payment can decrease your approval by almost $100,000. Moreover, take into account more than just the rate when looking at mortgage options. Things such as pre-payment options, penalty calculations, and mortgage portability should all be considered.”, suggests Mann.
Weighing in expert opinions, the Lower Mainland's complex real estate market undoubtedly continues to be dynamic, influenced by a myriad of factors. Real estate agents suggest that while interest rates remain high, buyers and sellers can take advantage of current market conditions, still practicing diligence and forethought. As accessing multiple lenders and products becomes easier, it is also important to consult with trustworthy mortgage professionals. As always, the age-old adage of buying low and selling high applies, and awareness of the current market is key to making informed decisions.