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Over supply of new condos?
Some real estate analysts have expressed concern regarding the over supply of new condominium in Greater Vancouver, especially in downtown core. There are literally billions of dollars worth of new apartments slated for completion over the next 3 years.
Expensive homes...low rental return
Currently, homes bought for investment are expensive for investors. The average rental incomes for all types of residential dwellings are not in line with mortgage payments. Investors lose money every month as rental income is not sufficient to cover mortgage payments, maintenance and taxes.
Why investors are still buying?
The answer is simple: they are motivated by the expectation of appreciation in property value in a rising housing market. They are taking the short term loss, but hope to realize their profits when they sell their homes in the future. No one knows for sure how much higher prices reach. As for now the housing activities are still positive and interest rates are relatively low for prime borrowers at around 6.0% to 6.15% for 5-year fixed rate mortgage.
If you like to have more information on the real estate market for Richmond, B.C. you can contact James Wong 604-721-4817.
