There has been some interesting news for the Vancouver real estate market in April. The mortgage levels are maintained low, which should attract more potential home buyers to buy new property right now, even in the overpriced environment of Vancouver real estate.
Low interest rates both for fixed and variable mortgages did not help to maintain the high number of sales in the Great Vancouver, which led to a 13.2 per cent decrease of sales in comparison with April 2011. Real Estate Bord of Greater Vancouver (REBGV) president Eugen Klein assures citizens that "although April sales were below what’s typical for the month, we continue to see, with a sales-to-active listing ratio of nearly 17 per cent, a balanced relationship between buyer demand and seller supply in our marketplace.” (source here)
Given the low interest rates of the mortgages, it is more than obvious that they are the reason for maintaining the level of overpriced housing. The government of Canada is still waiting and refuses to further reduce the legal limit of a mortgage from 30 to 25 years. The central government also announced that it is going to keep the interests rates low. There is some speculation on the Internet about the possibility of hiking the mortgage rates in the summer, but given the reports from mortgage specialists, it is improbable that we can expect some changes in the next two months both for fixed and variable rates.
Even some bloggers and economists are panicking about the possible hike. The last RBC survey reports an increase in the confidence of Canadians. “Half of mortgage holders (55 per cent) do not think interest rate increases will cause them financial difficulty (up from 49 per cent a year ago).”
Next month will show if the decrease in Vancouver sales was just a statistical deviation or a symptom of disease. For now, Canadians should stay calm and keep confidence in their government and banks that mortgage rates will stay low as promised.