WATCH: Lower interest rates are expected to heat up the spring Metro Vancouver market even more. John Hua reports.
A lowering of a popular financing option for home buyers could cause more harm than good for at least one Vancouver couple.
“Why couldn’t [interest rates] just go up to where they were before, and we would probably be able to find a place?” asks Melanie Lee. She and her husband are looking to buy their first home, but have found themselves on the losing end of several bidding wars.
“It always feels like you’re getting slapped down and not winning the war. It’s a very tough market,” she says.
Virtually all major Canadian banks have lowered their five-year fix term mortgage to 2.79 per cent in recent days, the second major reduction they’ve made since the Bank of Canada lowered its overnight interest rate to 0.75 per cent in January.
It’s one of the reasons that Vancouver’s housing market has surged in recent months. The Real Estate Board of Greater Vancouver said total sales in February were 20.2 per cent above the 10-year sales average for the month. They also reported the average price for a single family detached property in Metro Vancouver is now over a million dollars.
“These housing are selling 100 to 200 thousand above asking price. As a first-time home buyer, it’s very frustrating,” says Sherlock Yam, a mortgage broker for Verico Clear Trust Mortgages.
“We’re seeing a lot of people who own houses see how crazy the market is going, and they’re listing their properties, hoping to get way above asking price, which is what’s happening.”
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