The future of the local housing market

I recently sat down with mortgage expert, Kathie Scott of Dominion Lending Centres to discuss the current situation in the real estate industry. Kathie gave me some great insight as to where the Canadian Housing Market is heading in the West, and what we can expect in terms of rates within the next year.

With the recent downturn in the US economy one can only presume our Canadian markets will follow. However, that doesn’t seem to be the case, at least not yet. With our Loonie at its strongest in over 3 decades and the national unemployment rate at its lowest since 1974, what does that mean to the average Canadian consumer? And will our booming housing market follow the same demise as that our neighbours to the South? The Canadian housing market is still pulling strong, despite predictions from the experts that we’ve reached a saturation point. The Lower Mainland boosts some of the fastest growing housing markets in Canada. From the Tri-Cities to the North Shore, sellers are getting their asking prices and even more. As far as lending is concerned, no longer are we finding the bargain-basement rates of 4.5% (or lower) that were being offered about 4 years ago. The big banks are offering up a 5-year fixed rate on a residential mortgage at 7.44% posted.

So which will be the first to give in? Will house prices eventually level off, and maybe even drop enough for the baby boomer’s offspring to buy in to the market? Or will mortgage rates stay where they are, and hopefully decrease with the inverse result of higher housing prices?