Home prices skyrocketed in 2017. The cities that felt the most impact were Toronto and Vancouver. Prices dropped somewhat in British Columbia when the province initiated a tax on foreign buyers. But still, a house that sold for about $708,000 in 2015 shot up to around $933,000 and then down to about $896,000 after the tax was implemented.
One of the things that is likely to affect real estate values in 2018 is the stress test initiated by the federal government. That means that home buyers must show they can qualify for more of a mortgage. In other words, if the prime rate is at five per cent, but purchasers shop around for a mortgage and snag a rate of 2.5 per cent, they have to show that they could still afford the home at the prime rate. That will make things tougher for some home buyers, especially first-time purchasers.
Few experts are making predictions about the interest rates. It stands to reason, however, the higher the rate, the narrower the window becomes for purchasers to be able to afford the home of their dreams. Some economists say, they expect the Bank of Canada rate to increase by two per cent by the time 2019 rolls around. Canada’s immigration policies may also affect pricing since housing demands will likely escalate prices, especially in cities like Vancouver and Toronto.
The real estate market in British Columbia continues to hold its own, despite its peaks and valleys in 2017. Those thinking of either purchasing or selling real estate would do well to get legal advice from a lawyer who has experience in real estate law. A lawyer will always make sure his or her client’s best interests are looked after in any contractual agreements.
Source: ctvnews.ca, “Is 2018 the year to buy a home? 5 factors that could affect housing prices“, Josh Dehaas, Dec. 28, 2017