For future or current homeowners who are “on the fence” about purchasing now or later, we have compiled a chart showing comparable prices and rates.
We chose two different properties in the greater Vancouver area and matched them with the rates at that time:
- current rates at 3.50%
- 2007 – 5.35%
- 2005 – 4.39%
All prices are based on the full sale price and a 35-year amortization. It is interesting to note that since there was no 35-year mortgages in 2005 the mortgage payments would have been even higher!
MACKENZIE HEIGHTS PROPERTY:
A 33 x 120 lot in the Mackenzie Heights area sold in 2005 for $720,000. In 2007 the price was $1.1MM. Toady, that same property is currently selling for $1.3MM.
The numbers indicate that even though the price of the property has increased by 18.8%, the price of borrowing an extra $200,000 and calculating new rates dropped by 7.01%.
SOUTH GRANVILLE CONDO
A two-bedrooms, two-bathroom 940 sq ft condo in the South Granville area sold for $427,500 in 2005. In 2007 it sold for $549,900. It is currently listed for $619,000.
In this example, the price increase of the property was 12.57% while the price to borrow an extra $69,100 dropped by 11.43%.
We recognize that some people are hesitant to purchase a property now and believe that the market will correct itself.
In conclusion when you consider the last 3 years and anticipate the next couple of years, NOW is the best time to purchase that home.
Thinking of buying or selling a home in Vancouver? Check out the guides below for information, or contact us with any questions you might have.