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Thursday, February 24, 2011

vancouver real estate update

affordability shrinking again

New lending rules scheduled to take effect next month are stimulating housing sales, according to local mortgage brokers.  first-time home buyers are trying to arrange financing for 35-year mortgages.
The federal government’s decision to reduce the maximum amortization period for government-insured mortgages from 35 to 30 years, effective March 18  will reduce affordability, particularly for first-time buyers, because monthly payments increase when the lending period shrinks.
If the average person earns around $50,000 per year. With a five-percent down payment, they can generally afford a $280,000 home at a four-percent interest rate and with a 35-year amortization period.
 If the mortgage is reduced to 30 years, the same buyer can only afford a $260,000 home( and if interest rates rise, as many observers predict, they’ll put an even greater squeeze on first-time buyers.)
 At 30 years with a five-percent rate, this same buyer would only be able to buy a home worth $230,000.

That could buy you a small closet in the sky, or a nice little laneway home if someone can give you their backyard.

And speaking of the closet in the sky. There is alot of hype about pre sales and entire developements selling out. But sometimes this is all a facade.Be careful of falling prey to the hype that surrounds some presales.
note here  a supposed craigslist ad
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CraigsList ad:
*PEOPLE NEEDED TO LINE UP FOR NEW CONDO PROJECT

Just as the title says, we need people to hold spots and line up for a new condo project located in Burnaby (Kingsway/Willingdon Ave). Line up may start as early as weds/thurs night. Grand opening is Saturday February 19, 2011.

Warm beverages and washrooms will be provided by the developer.

Shifts are determined on how long you would like to stay. (preferably 8hours+)

Get paid cash quickly for sitting in a line up!

E-mail me your phone number + e-mail for more details. job-syk6p-2212992997@craigslist.org


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The question is did they really want the spots held for overseas buyers or did they already sell units over there and wanted it to look like it was in demand?


Presales often come with a cutom designed contract- favouring the developer. There are so many things to lookout for - always hire your own agent and always get some legal advice on the contract.

for example. In a phased developement, did you know that if phase 1 was built before new home warranties and you buy in phase 4 with full warranty- you will be required to pay for any remediation required in phase 1 as you are all 1 strata! Or what if you buy phase 1 and phase 3 will have a great pool, rec centre etc.. but developer elects not to build anymore phases,  what recourse do you have?
Always get independant advice. Here is Wendy Mesley learning how they create the hype in presales and learning to get sober second advice:

http://www.youtube.com/watch?v=SNyltNIHhgs


Feel free to follow my real estate blog at http://www.thinklittle.net/ as well


1 comment:

  1. It is not impossible if we found out that many people from different countries are buying real estate in Vancouver because it is a great place to have a property.
    Vancouver Real Estate

    ReplyDelete