Fear of missing out is driving some first time home buyers to dip a toe into Metro Vancouver’s scalding real estate market, but more are hanging back, according to a new survey from RBC.
According to a survey of 2,000 Canadians, 45% of British Columbians said it was a good time to buy, while 55% said it makes more sense to wait until next year. The survey also tracks respondents’ intent to buy a home within the next two years, and that measure, at 27%, was up compared to 2014 (22%).
Low interest rates and the assumption that Metro Vancouver property values will only continue to increase are nudging some buyers to make that big purchase. The Bank of Canada, which dropped its overnight rate to 0.75% in January, is not expected to increase the rate until later this year.
“In British Columbia respondents are saying it’s a seller’s market,” said Inde Sumal, vice-president of residential mortgages in British Columbia at RBC.
“Half of British Columbians believe that house prices will only go higher next year. That would explain why half of those surveyed believe it’s a good time to buy now.”
According to the survey, 46% of British Columbians believe house prices will be higher next year, compared to 39% of Canadians.
Prospective home buyers in British Columbia are also being motivated to buy based on the assumption that prices will continue to rise and their investment will continue to appreciate, Sumal said.
The latest statistics from the Real Estate Board of Greater Vancouver show that buyer demand in May was the greatest it’s been in the past three years. A lack of housing inventory compared to surging demand has fueled price increases of 11.5% for detached homes, 5% for townhomes and 4% for apartments compared with one year ago, according to Central 1 Credit Union.
In May, the benchmark price for a detached house in Greater Vancouver was $966,500; $469,100 for a townhouse; and $377,500 for an apartment.
@jenstden
