I have been dropping subtle (okay maybe not so subtle) hints in past posts and on twitter that I have been itchin' to buy a place here in Vancouver. I recently had an email from a reader asking me what the hell I was thinking why I am deciding to buy a place in Vancouver with the current real estate prices. Being the frugal lady that I am, he's probably wondering if I'm on crack- considering home prices are ridiculous quite high.
So other than purely putting an end to home envy, I have a few other reasons why I am deciding to buy a place in the near future. I wanted to take advantage of the recent mortgage rules changes that came down in April (thanks to good ol' Jim) in an effort to cool the housing market. With the recent mortgage changes, I anticipate that more people will not be approved for as much of a mortgage as before (unless you have more than 20% down), so the real estate properties I am interested in should decrease in price. Right now in Vancouver, it's definitely a buyer's market. Things are cooling down, houses aren't being snapped up left-right-and-centre anymore. I actually see signs on lawns sticking around for more than a few weeks (which was almost unheard of a few months to a year back).
I am wanting to take advantage of the low interest rates with a variable mortgage (we were pre-approved for Prime – 0.6%), and plan to pay off the home as if it were fixed. Remember, the first few years of your mortgage is predominantly interest. Any extra payment on top of the mortgage payment goes straight to the principal- so hopefully we can tame that beast in under 15 years.
What we (we meaning me and my boyfriend- hoooollld your horses- we're planning to do everything 50/50 and planning to get hitched soon, so none of this asset-confusion will ensue in the event we break up) are planning to do is buy a home with a mortgage helper. We plan to use the mortgage helper to pay it off even quicker, and take advantage of the tax deductions you can have when you use your principal residence as a business. I can't wait to be a land lady! (My dad is quite the landlord- so he can give me a hand).
With the recession still in full-swing (did ya see the market plummet last week??) and the financial crisis going on in Europe, I don't anticipate the interest rates rising anytime soon (and if they do, bring'er..! I'm ready!). I also anticipate that people will continue to look into real estate for shelter from the market storm. Considering the different market we have here in Vancouver (lots of investors from abroad- e.g. China- who don't even need “subject to financing clauses”), we did not have the real estate meltdown/ foreclosures that the rest of Canada and a large portion of the United States experienced. So I don't see the prices for homes going much lower anytime soon.
Besides, I heart Vancouver… I can't see myself leaving, really. Where else can you snowboard and hang out on the beach on the very same day? The secret's out- our city rocks.
With the above being said, we haven't had any luck finding a place we like so far. A lot of homes we like have been out of our price range, or not in a good area that would generate good rental income. We have also been outbid on a few offers. But I believe (go ahead, laugh at me for being sentimental haha) that things happen for a reason, and we will find our home soon. Wish us luck!
Whaddya think, readers? Do you think I am off my rocker? Would you buy at this time or would you not?