New home owners and Low interest Rates

[dasnowman]

HI I'm just wondering how many people are taking advantage of these crazy low interest rates and good pricing on condo's and house's. Well good for the lowermainland.

I know if I was paying rent on someone else's mortage right now, I would be trying my hardest to get into my own place.

How can you beat 1.7% ?? That's just giving money a way.

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[alcoolaid]

Pricing on condo's and house's are still falling.

[bender]

my rate is at 1.6%, but keep in mind that it's only that low because it's variable rate. it was at 5% or so on jan /08. there's no guarantee that it will stay that low. if only I could lock it in at 1.6%

people buying a home when you really can't afford it; isn't that why the economy is in the mess it is now?

[Linkseal]

I am still waiting for the housing price drop more ...

[shawmacs]

I am just trucking along on my 5.19% 5 year fixed

[Yannerd]

Originally Posted by alcoolaid

Pricing on condo's and house's are still falling.

+eleventy

Anyone who thinks that housing prices are a steal right now is just naive. When the average housing prices in Vancouver are double compared to the rest of Canada there's something wrong. We don't make more money here than the rest of Canada (at least not double) and foreign investment can only drive housing prices so high. I think once reality sets in and the foreclosures start being more frequent, then we can start talking about "cheap" housing.

[rockcrete]

Vancouver will ALWAYS be far more expensive than the rest of Canada. It is THE most desirable place in the country to live, especially when you factor in the fact that it is the only major city in the country that remains relatively snow free. There are a number of other unique factors in Vancouver that also contribute to why housing prices are expensive here and they will never go away and will serve to only make it more expensive as our population continues to grow.

My personal opnion is that if you're a first time buyer that doesn't jump at the opportunity right now, you're going to miss the boat.

The signs I'm seeing right now point to prices stabilising and even beginning to go up in the very near future.

The only reason our market has slumped is that the "profiteers" that slapped $5000 down on a bunch of condos expecting to make $100,000 profit on each one by selling prior to the completion date have been stung. Those people are now out of the market and hurting, but the buyers looking to live in places are still there, just a little cautious - but things are starting to look pretty attractive. I plan on purchasing a house in the very near future and tenanting it up and down - it's very attractive from an investment standpoint right now.

The fact that my uncles boss is sinking a billion dollars (seriously) into real estate right now tells me something.

I work in the construction industry and things have stabilised right now and are even showing signs of life.

[Drizzie]

Originally Posted by shawmacs

I am just trucking along on my 5.19% 5 year fixed

4.99% 5 year here. GF is a broker, as of yesterday they are offering 4.19%, possibly 4.1% in the coming days! Definitely worth it for some people to pay the penalty and renew depending how far into it you are.

[Wizzelt]

we are locked at 4.2 right now until this December. crossing my fingers that we can score an even better rate at that time.

no better time than now to be looking at buying (with long term view in mind and if you are financially stable/liquid).

[shawmacs]

Originally Posted by Drizzie

4.99% 5 year here. GF is a broker, as of yesterday they are offering 4.19%, possibly 4.1% in the coming days! Definitely worth it for some people to pay the penalty and renew depending how far into it you are.

Yeah, my rate is blended. I originally had 5.25% but when I moved they ported my mortgage and blended the rate with a new 5.1% offering at the time. Unfortunately that reset the clock and I still have 3.5 years to go before I can renegotiate without penalty.

I agree on going with a Mortgage Broker. They can score you some pretty great rates and it doesn't cost you a dime.

[Drizzie]

^^ It seems that not a lot of people realize that you have a tool such as a broker. They are free!!

[gireland]

Originally Posted by shawmacs

I am just trucking along on my 5.19% 5 year fixed

+1

I had 5.5% fixed for 5 years that is actually due up for renewal in August!



I can't imagine having a few hundred extra dollars per month in my jeans and still paying down the same principal.

Or paying the same amount I've been paying and shave a year or two off the total!!

Heck, If I could swing it, I'd be trying to buy up a single bedroom in Yaletown now for the investment.

[gireland]

Originally Posted by Yannerd

+eleventy

Anyone who thinks that housing prices are a steal right now is just naive. When the average housing prices in Vancouver are double compared to the rest of Canada there's something wrong. We don't make more money here than the rest of Canada (at least not double) and foreign investment can only drive housing prices so high. I think once reality sets in and the foreclosures start being more frequent, then we can start talking about "cheap" housing.

It's all relative.

You wanna move to some outskirt of Winnipeg and get a huge house on a few acres for $100K?

Neither do the rest of us here.

[shawmacs]

Originally Posted by Drizzie

^^ It seems that not a lot of people realize that you have a tool such as a broker. They are free!!

Why would you want a broker that's a tool?

[Yannerd]

Originally Posted by gireland

It's all relative.

You wanna move to some outskirt of Winnipeg and get a huge house on a few acres for $100K?

Neither do the rest of us here.

Unfortunately, people buy homes not on based on value but rather what monthly payments they can afford. When the banks came out with a 40 year amortization so that they could continue to boost the real estate market, alarm bells should have been going off right then and there. Sure it's relative but $50K income here in Vancouver is the same as $50K anywhere else.

Originally Posted by shawmacs

Why would you want a broker that's a tool?

That's what I read too

[Jeff54]

i'd like to take advantage...but with the economy i dont have the job security to jump into a mortgage

[Wizzelt]

Originally Posted by Yannerd

Unfortunately, people buy homes not on based on value but rather what monthly payments they can afford. When the banks came out with a 40 year amortization so that they could continue to boost the real estate market, alarm bells should have been going off right then and there. Sure it's relative but $50K income here in Vancouver is the same as $50K anywhere else.



That's what I read too

20 year Amor right here baby.

when we were shopping way back it was right around that time that they started to offer the 30 year and 40 year more readily and it was pretty telling even then.

what was really funny was we did the math and figured out what we would get preapproved for and knew we didn't want/need that number...then when we started getting offers from our Broker the #s were literally DOUBLE what we should have been approved for and some of them were Zero down.

it was so strange having to say...uhm, no we don't want or need $600,000, at 35 years, zero down... thanks though...25% down and 20 years please.

[talsnic]

everyone has a story on when to buy. please do a few google searchs on trends over the last 100 years, and you will get your answer.

The short cut is... buy when the canada bank lending rate starts to increase, even if the housing is still continuing to decline.

anyone in my mind who says to buy now, is either connected some how to their own paycheque, or they have not researched enough to understand this issue. A lot of the media is trying to hype you back into buying again, when in reality its different.

The goofy part is that the lower mainland is going to host the winter games, so the prices might not sink like the rest of the provence.

Remember that the entire housing market in BC is still overinflated, and well above true market value.

[rockcrete]

The Vancouver area doesn't follow the normal rules, it is a unique market within Canada and will do it's own thing.

I could go into the numerous reasons for this, but I can't really be bothered to type it all out.

If you are buying to live in long term, it is the perfect time to buy. If you're buying to make a quick buck, you are gambling.

[semaj]

I am saving for a down payment as much as I can right now!!!

[Drakar]

you wont ever get what the interest rate is rated at anymore, variable and signed mortgage from a year or 2 ago is the only way, all banks are now prime + x% and x > .85 for the most part.

If someone gets a mortgage right now walking in that is prime or less, let everyone know so they can switch asap.


that being said when you mortgage is up for renewal you will have to pay the new rates being a prime + vs prime - from before.


oh and long live variable rates.

[Yannerd]

Originally Posted by rockcrete

The Vancouver area doesn't follow the normal rules, it is a unique market within Canada and will do it's own thing.

I could go into the numerous reasons for this, but I can't really be bothered to type it all out.

If you are buying to live in long term, it is the perfect time to buy. If you're buying to make a quick buck, you are gambling.

As much as we may like to believe that, Vancouver still has to follow the trends of the economy. Right now, the economy is losing steam to say the least and given the low consumer confidence it's doubtful that Vancouver is going to be booming while everyone else is hurting. Remember, the global economy is being affected.

US consumer confidence is low -> less people buying consumer goods -> factories in China shutting down -> less foreign investment from Chinese nationals -> fewer foreign investors looking to invest in real estate in Vancouver

That's just one example of how it's all interconnected. It hasn't hit rock bottom yet and with the BoC cutting interbank lending rates to 0.5% that says something about what economists are thinking is going to happen in the short term (next 3 years).

[rockcrete]

I beg to differ from your opinion.

Vancouver is still THE place to be in Canada and has traditionally bucked the national trend anyway. People looking for jobs are going to go somewhere to try and find them, and I'm betting a lot will come here.

At this point, business wise, my future is looking pretty bright, I've been through a short slow down (three - four months) and am now back where I left off last year and am looking at a lot of stuff coming my way down the pipeline.

I personally am out spending and not sweating it, I'm in the middle of renovating my whole kitchen, just bought a bunch of new electronics and even a LARGE new boat. There are deals out there, and I think a lot of people are going to regret not taking advantage of them while they could.

Once the current backlog of condos on the market thins out, everything is going to take right off again. In my personal opinion, Vancouver is not in the least over priced, (although it had gone a bit too high, too fast) and there actually some areas that are a little undervalued and represent excellent opportunities right now.

The only people I come across saying houses are too expensive and over priced are those that don't own one, and those same people were saying the same thing back in the early eighties when a house in North Van was $120,000..............

Vancouver is actually extremely cheap when you compare it to comparable international cities - you are comparing apples and oranges when you try and stack it up against any other Canadian city. It is a worldclass city and additionaly, due to geographic constraints, there is very little land located within a half hour radius of the downtown core or even for that matter a one hour radius which creates a very high demand and consequently very high prices.

[Yannerd]

I suppose we'll never see eye to eye on what the real estate market and there's no point in continuing a discussion that's just going to be back and forth.

I do have a few points I wish to make though. I agree that housing prices will continue to appreciate in the long run as that's just the nature of real estate in a market that has limited land. You'll start to see Vancouver build vertically rather than horizontally compared to other cities like Calgary. However, in the short run, I just don't see that rebound happening just yet.

Vancouver is by no means an international city on the world stage. London, New York, Tokyo, and Hong Kong come to mind when you say international city. Vancouver has a meager 2 million people and is still lacking the infrastructure and services to call itself a world class city. World class cities are moving 24 hours a day 7 days a week and have a transportation system that can accommodate that. The day when I can honestly say I don't need a car to get across town I'll say that Vancouver is a world class city.

You can't disconnect Vancouver from the rest of Canada as a market on its own. The point I'm getting at by saying that Vancouver is double the rest of Canada is not to compare us to the rest of Canada in terms of real estate value, but rather the fact that we make the same amount of money as the rest of Canada. Our median income is practically the same meaning that our buying power is the same as Bob in Saskatoon or Joe in Newfoundland. The dollar doesn't change when you step into Vancouver.

[sandman21_21]

Originally Posted by Yannerd

I suppose we'll never see eye to eye on what the real estate market and there's no point in continuing a discussion that's just going to be back and forth.

I do have a few points I wish to make though. I agree that housing prices will continue to appreciate in the long run as that's just the nature of real estate in a market that has limited land. You'll start to see Vancouver build vertically rather than horizontally compared to other cities like Calgary. However, in the short run, I just don't see that rebound happening just yet.

Vancouver is by no means an international city on the world stage. London, New York, Tokyo, and Hong Kong come to mind when you say international city. Vancouver has a meager 2 million people and is still lacking the infrastructure and services to call itself a world class city. World class cities are moving 24 hours a day 7 days a week and have a transportation system that can accommodate that. The day when I can honestly say I don't need a car to get across town I'll say that Vancouver is a world class city.

You can't disconnect Vancouver from the rest of Canada as a market on its own. The point I'm getting at by saying that Vancouver is double the rest of Canada is not to compare us to the rest of Canada in terms of real estate value, but rather the fact that we make the same amount of money as the rest of Canada. Our median income is practically the same meaning that our buying power is the same as Bob in Saskatoon or Joe in Newfoundland. The dollar doesn't change when you step into Vancouver.

+1 to that. If you need more proof that Vancouver is set for a decline, read some articles on Globe Investor, or any other financial site. Both have stated that it will be a down year for Canadian real estate, and both stated that Calgary and Vancouver would be the hardest hit based on their lack of affordability. The only people who have thought that Vancouver is going to recover quickly are people who are tied to real estate (ie. Real Estate association, etc.) and need the market to stabilize to keep themselves busy.

Yan, you've made the best arguments in this thread. I don't think there will be a US-esque housing crash, but those who think that the housing market will recover faster than the economy are only kidding themselves.