Wain Ho said:I am a realtor in BC and i have many asking me this question and i have also asked my mortgage broker this many times.
It is not wise to buy a house when you are waiting for the price to go down, you should buy a house when it is right for you, i.e., financially stable. THe market will never go down to what you like and what you think is right. Even when the prices go down to a certain point, it will never go down to what you think is low. Strike when the iron is hot is usually the best way to go. Talk to a lending center and present them with your financials and they will work with it to find you the best rate among all banks in the province.
They will also help you to decide when is the best time to buy.
Fear is the most common obstacle but education overcomes this! You need to find an experienced realtor who can guide and educate you of finding the right property, then that is the right time for you to buy.
newtone said:House prices will never go down in Canada, too many people have procrastinated and ended up renting because they waited to buy a house and now its got beyond their reach. You buy whenever you are ready. Its as simple as that.
Sorry... I find that hard to believe. Actually cross that. It's impossible. $1100 a month will get you one of those 1 bedroom commie block buildings in North York from the 60's. I am renting my own one bedroom in downtown Toronto that is worth 250k for $1325 (utilities included) and I know for a fact I am undercharging. There is no way the place is worth 400k unless you cut a deal with a family member.Dejaavu said:House prices are difficult to predict. Nobody knows what will happen to house prices.
Both rents and borrowers with mortgages take risks. Renters rent a housing unit and borrowers with mortgages rent money from a bank/lender. Renters have the flexibility of moving anytime where mortgagees are less flexible.
It is always best to buy when the market is going up since the equity increases in the property. If the market is stagnant or going down then it doesn't make sense.
Economists calculate whether housing is overvalued or undervalued by multiplying a monthly rent a unit would get over 15 years (180 months) if a property is equal or more than 180 monthly rents then it is a good buy (undervalued or valued properly); if it is higher than 180 months rent then it is overvalued. For example, if a condo in downtown Toronto can get 1000$ in rent then that condo's fair market value (absent distortions in the market such as a bubble, lack of supply, ultra low interest rates, too much credit etc) should be around 180-200k. If it is more than that then it is overvalued. If a condo is less than 180 k then renting doesn't make sense at all.
Personally, I decided against buying in Toronto now since I can rent a unit for about 1100$ and if I wanted to buy it would at least be 400 k. Doesn't make sense in my case since there are other expenses associated with 'owning' a property such as property taxes, maintenance, interest on mortgage) etc. If that unit goes down to 250k, I would consider buying it, if not I am a renter
This is illogical and poor advice that is usually spouted by either naive or deliberately self-serving realtors.Wain Ho said:As a realtor, I would always recommend my buyers to buy instead of rent as you do not want to pay someone else's mortgage. Do not build their equity for them in another words and in the end you will get nothing, just throwing your rent away. Interest rates vary if you go to a lending center which I strongly recommend, as they will look at your financials and decide which is the best for you. I am working with a financial consultant and he has helped many of my clients as most of them were tempted by the fancy products some banks have.