Is Now the Right Time to Buy Real Estate in Greater Vancouver?

Is now a good time to Buy Real Estate in BC?

My answer is a definite Yes.

The main fundamental driving today’s strong real estate economy is Demand, which is exceeding Supply. Demand derived from low interest rates, pent up demand from a recovering recession, and general desire to live in BC: climate, beauty, location, opportunity, beliefs, ect. The supply is very limited, especially in Geographically constrained areas like The Northshore, Downtown, and the West Side. As 2010 goes by and 2011 and 2012 quickly come, I believe Demand will continue to grow, especially after billions of people were exposed to BC’s beauty, charm, and excellence during the extremely successful Winter Olympics including Canada taking down 14 Gold Medals, an Olympic Record.

Canada has tolerant immigration laws and the flow of new citizens coming from Asia, Europe, The Middle East, South America, Africa, Australia, and New Zealand is growing steadily. The Canadian Banking system is a winner, widely touted as the best in the World, providing buyers with security and peace of mind that a collapse like we have seen in The United States will not occur.

Real Estate as a primary residence is an amazing purchase because it produces rewarding pride in ownership, it creates a rock solid investment rather than paying your landlords mortgage, and a valuable asset to draw funds from for other ventures.

Real Estate as an investment is very intelligent as it capitalizes on Leverage. With mortgages and the ability to put as little as 5% down, $20,000 on a $400,000 purchase, then have a tenant provide positive cash flow, the future return on investment is often 100-300% or $40,000 - $80,000 when you sell your investment property. Many people will hold a solid investment property for decades, enjoying the positive cash flows and paying down the mortgage creating a massive savings account to draw upon or let grow. The Province has passed a new law that investors must put a minimum 20% down after mid April, so if you are like me, the next 6 weeks presents a great opportunity to pick up an investment property. Brand New Luxury 1200 sq ft 2 bedroom condos in New West, Port Moody, and Port Coquitlam can be bought for $300,000 with $1500/month tenants in place.

Interest Rates are projected in increase in 2010, but I do not foresee a large spike in interest rates as most of Canada and all of the US is still in a recessionary period that the Federal Reserve monetarily monitors by keeping interest rates low. 5 year fixed mortgages can be had right now for 3.69% and 3 year variables can be had for 1.95%, unbelievable all time lows, making Real Estate as affordable as ever to high debt ratio purchases, compared to past times when prices were much lower but lenders were strict.

So if you are an investor and wondering about RRSP’s, stock market, or Real Estate I would suggest do all three, but start with real estate because the sooner you get in, the more your going to make and the most use you will get out of your investment. The solid brick, concrete, and lumber of real estate that you can touch, live in, and improve through renovation, will surely be a cherished and valuable asset.

If you have any questions about Vancouver and BC Real Estate, please feel free to call me at 604.562.0532 or email me at stu@stubell.com.