Recently a single-detached house along busy Southeast Marine Drive in Vancouver sold for $ 912,000 over the list price.
And then a house in Surrey sold for $ 899,000 in 2019 and sold for $ 901,000 more in early 2022.
The market is so overheated that first-time buyers are getting left further behind and are unable to compete with other buyers who are willing to pay several hundred thousand (or even up to $ 1M) over asking.
The only people that are getting ahead are the property owners who are simply trading up or buying even more property.
Apart from taxing people more, what can be done to relieve scarcity and pricing pressures?
Step back and wait for a better time to buy
Wait until the market cools instead of worsening the situation. What goes up must come down.
If there’s anything that realtors, mortgage brokers, government policymakers, and property investors agree on is that once interest rates go up, this would let some air out of that hyper-inflated property “bubble” that we find ourselves in.
The problem is that people fear that they are missing out (i.e., the F.O.M.O. effect).
So instead of 2 or 3 people competing to buy a single property, you’re getting 20 people bidding on a home, pushing property prices several hundreds of thousand dollars higher than they need to be.
Takeaway: you’re going to overpay if you buy, so wait a bit until the market cools, when house prices ease a bit and the supply of homes increases.
Look further afield where it’s more affordable
Many of us can work remotely, which means that we can ditch our cars and our downtown offices and work anywhere we want. Guess who’s benefitting from the overheated Toronto and Vancouver market?
Places like Calgary have been in the real estate doldrums for several years now since the downturn of the Alberta economy, which is slowly resurging.
Other places you can look at?
What about PEI or the Yukon?
Real estate prices are more reasonable and you won’t be buried in house payments.
Just look at employers who will support remote work. Or better yet, start your own company.
There’s no more need to be an in a major city centre to start a multi-billion dollar company.
Remember that many global software giants are headquartered in sleepy towns like Walldorf, Germany (SAP) or Redmond, Washington (Microsoft).
Property investors need to give way to first-time home buyers
If we want our children and grandchildren to be able to afford to rent – or buy – places to live in, then people (particularly investors who already own one or more pieces of real estate) have to stop piling into the property market and commodifying it even further.
Existing property owners need to step back and leave space for first-time buyers to be able to get into the real estate market and build a nest egg for them and their families.
Otherwise, the property will keep on doubling in value every 10 years (based on a yearly 8% annual appreciation), putting it further out of reach for young adults who are trying to buy their first home.
Know of anyone thinking of refreshing their kitchen or bathroom, doing a professional makeover to increase their resale value or simply enhancing their own level of enjoyment?
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