Kitsilano Condo

First time home buyer’s still jumping into Vancouver’s real estate market

Getting ready to buy your first home?  If you live in Vancouver you’re not alone. A recent survey by Harris/Decima shows that new lending rules and market conditions are having little effect on consumer’s intentions. These survey results can be attributed to several reasons.

The first time home buyers plan available to BC residents which makes getting into the real estate market more affordable can be a large benefit for those that qualify. Under the program buyers are allowed to use as much as $25,000 from there RRSP account toward a down payment on a qualifying home which is repaid over time.

There is also the first time home buyer’s tax credit worth up to $750 in 2009 and subsequent years.  At tax time you can direct any rebate toward your purchase.

The survey showed that 74 percent of Canadians that are looking to purchase their first home are considering an amortization of 25 years or less – much lower than the 35 year maximum.  Paying of a mortgage faster has become a priority for many Vancouverites.

Is the new federal new mortgage rule having much effect at all? Yes. Under it anybody qualifying must do so on the five year fixed rate ensuring that as rates increase they are in a better position to make their payments. The effect it is having is in slowing down market sales to more sustainable healthy levels.

Buyer’s trying to time the market in expectation of another dip may be waiting some time. Recent CMHC analysis and BC economists are anticipating the Vancovuer real estate market to move towards more balanced conditions as supply and demand come closer.  Price appreciation is expected to continue into 2011 but at a modest pace, not anywhere near the double digit levels seen during 2005-2008.