Are we in the midst of a housing bubble? Is the bubble going to burst?
Torontonians have flocked to the housing market for the past few years in unprecedented numbers, and the professional sellers have created a situation where only those with deep pockets can get in on the action. Bidding wars mean the price is only a starting number and buying is a tense high-stakes game for those willing to extend themselves to the max. Consequently, prices are high, really high!
So, are we in a bubble, where tomorrow the home you own may not be worth what you paid for it? Are prices ready to plummet?
For most Toronto homes, this isn’t too likely, as long as interest rates stay reasonable. But beware; if too many people have bought at prices they can’t really afford if interest rates go up, they might have to try to dump their homes. This could happen in condos, where there are lots of buyers all grouped in bunches.
Who has a crystal ball? Not me! The real estate profession will tell you not to worry and keep on buying. I’d make sure I can afford a possible bumpy ride with some turbulence!
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Hopefully the Bank of Canada's decision to raise interest rates for mortgages will help curb the free-for-all that happened in the States. Though it is unfortunate that owning a home has become such a luxury.
ReplyDeleteInteresting that you AND the National Post reported on this today!! Check it out:
http://www.nationalpost.com/news/story.html?id=2740736
Those selling homes especially condos are ready to help people buy, even having loans for a down payment available on site. People can borrow and borrow and borrow to buy. Hey, if I could qualify, maybe I'd do it!
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