Since early September the cost of borrowing money across Canada has gone up. The Bank of Canada rate increase is expected to affect real estate markets across the country but particularly markets in Vancouver and Toronto.
Many believe the higher interest rates are reflective of the strength of our national economy. The Bank of Canada notes our economy “is becoming more broadly-based and self-sustaining”. This type of communication goes a long way to boosting consumer confidence but the reality is for most Canadians it will now take longer to pay off a home, which begs the question … why buy real estate?
Right now Vancouver is considered one of the best places to live on earth. Ranking only behind Melbourne and Vienna according to this report from The Economist
Although our political stability is key, when compared to other parts of the world Vancouverites and those of us in the surrounding areas enjoy low population density and lower congestion, cleanliness, low crime, access to recreation and culture, high quality food, excellent health care, great schools and secure banks. And despite being expensive when compared to local incomes, Vancouver is still far from being one of the most expensive cities in the world. Think Paris, London, New York, Monaco etc.
When comparing our region to other parts of the world we still have a long way to go in terms of income opportunity – lacking many of the heavy hitter headquarters that offer high paying jobs – but we are well on our way to becoming recognized as one of the best places to live on earth . One can only imagine how this type of recognition will affect our local real estate prices.
We anticipate the Bank of Canada will take a wait and see approach to raising rates further this year and next but it has made it clear more tightening may occur should the brisk pace of economic growth in the country continue. (read more on rates HERE )
Over time rates will go up and rates will go down but locals will always need a place to live. If you can afford it … investing in your primary residence could be the savviest financial decision you make.
To learn how to buy your first home, upsize, downsize or make a lateral move. Consider our team.
Image courtesy of: Aditya Chinchure