There is a situation you can't buy a home even if you have money?! Why?

Hi, everyone. My name is Cindy Oh. I am a Vancouver realtor and rental property manager as well.

So, today I am going to talk about the Vancouver housing market and what's going on right now.

The Vancouver housing market was very slow last year. Of course, the reason was the interest rates kept increased,

but the market was suddenly starting very active from March to now.

I have several buyers and they are very frustrated because they are not looking for an investment property.

They want to move to bigger place, downsize, or having their own place.

However, some properties we did not even have a chance to view because there was already an accepted offer or was sold.

Also, we went to open houses, and we liked some properties, but a lot of properties were getting multiple offers.

Why does this happen again?? I will tell you the 3 reasons.

First of all, the interest rate rose by 25 basis point in June again. So, now it has been increased total 9 times.

The Bank of Canada's interest rate is 4.75% now and Canada’s big banks all moved to match the bank's hike, rising their prime lending rates to 6.95 %.

So, even though the interest rate rose by 25 basis point again,

people who have already pre approved at lower rate to buy before the pre approved expires.

Secondly, rental prices keep on rising very fast.

As of June 2023, the average rent for a 1-bedroom apartment in Vancouver is $2,775.

This is a 20% increase compared to the previous year.

The average rent for a 1-bedroom apartment in Downtown Vancouver is now $2,900.

Of course, rental prices keep on rising because of the dramatic population growth.

‎International immigration added over 34,000 people to British Columbia's population in the fourth quarter of 2022. This was an increase of 215.7% from the same period in 2021.

Instead of renting, when you buy, part of every mortgage payment you make goes towards the equity in your home.

Over time, you can build substantial equity, which you can profit from if you sell.

Owning real estate is one of the best ways to build wealth. Holding on to this valuable asset for the long haul can provide you and your family with a solid investment that you can pass down to your children.

Moreover, houses typically appreciate in value, so as you pay off your home and house prices increase, you’ll build more equity.

Thirdly, the government legislation had created more opportunities to purchase a rental property by allowing property owners to be able to rent out their strata properties without restrictions.

Of course, this benefit is good for some owners.

Nevertheless, this has caused an unintentional problem with investors buying up condo and townhomes and renting them out, people who are looking to buy to live in are being out bided. The wealthy investor is taking advantage of the rising rental rates.

So, the problem is this new rule give more opportunity to the investors to buy and rent at a high price and competing with people who want to purchase for them to live as their primary residence.