The real estate market is currently experiencing a shortage of available inventory, which is causing a decline in seller interest in listing their properties. This is primarily due to the increase in borrowing costs, which has made it difficult for sellers to qualify for the same mortgage amount as in the past. Additionally, the stress test, which determines whether borrowers can afford mortgage payments at higher interest rates, has contributed to the decrease in inventory.
As a result of the lack of available inventory, there has been a slight increase in prices, and multiple offers are becoming more common. Many buyers who have been waiting on the sidelines are now ready to enter the market, but there are not enough properties to meet the demand. While statistics may not paint the full picture, current indicators suggest that prices are unlikely to decrease and may even continue to rise slightly, which is worth noting for potential buyers.
In addition to the limited inventory in the real estate market, the rental market is also strong, particularly in Vancouver, which remains the most expensive city in Canada to rent. The average cost of a one-bedroom unit in Vancouver is $2640, while a two-bedroom unit costs $3632. Burnaby also ranks as the third most expensive city in Canada for rent, with one-bedroom units costing $2282 and two-bedroom units costing $3175.
This strong rental market can be attributed to the shortage of available properties for rent, causing demand to exceed supply, resulting in a competitive rental market. Landlords have the upper hand, and tenants often must pay a higher price for a desirable rental property. While this may not be ideal for renters, it does present opportunities for investors looking to purchase and rent out properties in these cities.
Overall, the current state of the real estate market is due to a combination of factors, including the rise in borrowing costs, the stress test, and the lack of available properties for rent. While this has led to a slight increase in prices, it is unlikely to be a dramatic change. However, those looking to buy or rent in Vancouver or Burnaby should be aware of the current state of the market and the high associated costs.