VANCOUVER (NEWS 1130) – You may not be able to afford a home with the rate housing prices are increasing right now, but they’re likely to stop growing according to a local realtor.
“I think that you’ll see a cooling for sure,” explains Steve Saretsky, a realtor with Sutton West Coast and author of Vancity Condo Guide. “I just don’t think the price growth that we’re seeing right now in the condo market is sustainable.”
He says correction in the housing market tends to happen slowly, but that could change. “You never know right? Because the government could come in and throw a, say ‘now it’s no longer a 15 per cent foreign buyers’ tax, it’s a 30 per cent,’ and then it just creates a psychological shock.”
Saretsky adds prices may not necessarily come down just yet, but rather the increases will likely stop very soon as a first step.
And if you look at things like the detached market in cities like Surrey, he says it’s a good indicator of what’s to come. “Another realtor I thought summed it up pretty well and called it a ‘slow drip’, where if you actually look at that market I mean it’s slowly correcting and the thing is most people don’t see it.”
This comes after a report by the National Bank of Canada found home prices around Vancouver and Toronto would likely decline in 2018 because of rising interest rates and stricter criteria for uninsured mortgages. “You can’t have an asset increase that much and keep going, at some point tied to incomes,” he says.
For those looking to get into the housing market in the near future, Saretsky says this could be a good thing, but he believes anyone thinking of buying property should consider the basics, like being able to afford payments.
Meanwhile, those who already own a place who think the value of their home is going to drop shouldn’t worry just yet. “But I think it’s always important to keep an eye on things and manage your finances.”
According to the National Bank, affordability in Vancouver has fallen the most it ever has 1994, as potential buyers also faced a surge in home prices.