Is now a good time to buy?
The market has gone through an adjustment period over the past 12-18 months as it was "trying to find itself" amidst the new landscape of the stress test and absence of foreign buyer. It appears as though the market has found its bottom as July showed the first signs of increased sales activity in quite a while. Prices for all 3 property types have pretty much stabilized in 2019 and are showing little movement up or down since the start of the year (see graph image).
Regarding current market trends, in the short term, we may see an increase in activity now that the prices have retreated to more reasonable levels, interest rates have come down, and the stress test rate was slightly relaxed. We are not predicting substantial growth in values any time soon as the buying market is still fairly sensitive to increases.
In the long term (12-24 months and beyond), we could see further correction in prices if interest rates ever rise, unless income levels increase to offset the higher rates. There's also talk of another recession at some point down the road, but any such discussion about market fundamentals that far out is highly speculative and predictions could change multiple times before we get there.
There are also those who believe we could see interest rates fall (several countries around the world are now offering negative interest rate mortgages). If this trend pervades, inflation (increasing values) will likely follow. Additionally, unrest in Hong Kong has potential to bring a significant source of capital back to the Canadian Real Estate Market.
In conclusion, without a crystal ball, it's impossible to predict the long term outcome of the market. Our advice to prospective purchasers is not to try and "time the market," but rather, to buy when the numbers align with their personal goals, timeline, and financial situation. If you can find a property today that will meet his needs for the next 5-10 years and you're comfortable with the monthly payments, then now is an OK time to buy. However, I would only buy with the understanding that markets go up and down and there may very well be a time in the future that your property will be worth less than you pay for it. In the long term, property values in the Fraser Valley have always recovered from downturns and increased over time.
If you are considering purchasing a home in Metro Vancouver or the Fraser Valley, we would be happy to grab a coffee with you and chat about market trends or answer any questions you might have.