I have had more than a few clients asking me about the recent studies released by the Canadian Real Estate Association (CREA) indicating a 3.5% decrease in the price of homes in BC by the end of 2011.
Should I wait to buy? I am asked.
Well, the same report predicts an increase of 2.3% for the balance of 2010. Assuming that there is no margin of error in these "studies" that would indicate a net decrease of approximately 1.2% if you were to wait for the next 18 months to make your purchase.
Lets do some common sense math. If I was to purchase the average Vancouver home at approx $700,000, a 1.2% savings would be $8,400. Nothing to sneeze at by any means! That would cover the land transfer tax on your eventual purchase. But, lets be realistic here.....if you are renting right now waiting to buy, you will undoubtedly spend more than $8,400 over the next 18 months. Also if mortgage rates increase by the predicted 1 -2 % over the same period you could pay $ 6,000 - 12,000 more in mortgage interest (assuming a 10% down payment).
If you are already a homeowner and are thinking of a move, you know how hard it is to time the sell and the buy, without a rental period in between to catch the best conditions of each transaction.
My advice?? If your purchase is for your home, get out with a qualified realtor and get a good deal on what you want....now.
Peter McKinnon, Centum Pacific Mortgages
Vancouver
http://www.peterlmckinnon.com/
peter_mckinnon@centum.ca
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