There has been much speculation that we are in the midst of a housing bubble which is sure to come to an abrupt end. The question some people are asking is, WHEN will the bubble burst?
Canadian Business Magazine’s reporter Larry MacDonald says that we are in the midst of a buying frenzy. Speculators are making purchases based on the assumption that prices will continue to increase:
… rank speculation seems to be in full bloom in the housing market. People are now signing agreements to purchase like they’re trading futures and options.
MacDonald urges caution. He thinks that Finance Minister, Jim Flaherty is making a mistake by not increasing interest rates. In fact MacDonald is also encouraging the Bank of Canada to increase its rates in order to slow speculators down.
The Bank of Canada should also reconsider its stance on interest rates. Its policy of maintaining extremely low interest rates has been, in large part, responsible for fueling the current mania for housing.
MacDonald’s article urges caution … and he is right. Buying a home is one of the biggest purchases most people make. You should always be cautious and know exactly what you are getting into. We give our customers ALL the information necessary to make a good buying decision. We explain everything you need to know about getting a mortgage. If there are risks we tell you up front, what they are and what you can do to minimize them.
If you have any questions about getting into the housing market now, give us a call at 604-736-1855.
Be sure to read our previous blog post were TD Economics predicts a 14.8% decrease in Vancouver house prices.
Read Larry MacDonald’s full article, Stop the housing bubble before it’s too late.