No Housing Bubble here

Real Estate Bubble???

We are in the midst of a crazy real estate market from coast to coast here in Canada. Properties are selling very quickly and in some cases there are multiple offers and they are selling not for thousands of dollars over list but hundreds of thousands of dollars over the listing price.

Here in Nova Scotia in particular where we are used to only modest gains in values of only single percentage points. There was recently a transaction in my subdivision, single family home, bungalow, 4 bedrooms, 1 bathroom and unfinished basement. The property had not been on the market since new 54 years ago. My Realtor told me that this home had 28 offers and sold for just under 300K over list price.

Now unless you have been under a rock lately you have heard some of the financial pundits talking about a possible real estate bubble here in Canada. While that headline does get a lot of attention, I don’t believe that is the case nor will we experience the pains that the US felt back in 2009.

A few facts to consider, since we are still in the midst of a pandemic our borders have essentially been closed to all except for necessary travellers. Normally Canada welcomes about 500K people per year to immigrate here but now it is down to just a trickle. Real estate inventories on the market are down compared to past years. So with low interest rates, record levels of immigration prior to the lockdown and general population with money to burn has only poured fuel on the fire that was already present.

Knowing this I don’t think we are on the brink of a similar bubble the American’s faced in 2009. We don’t have lenders making loans with low or no documents, nor do we have people qualifying for their mortgages on teaser rates like they did. Our mortgage stress test was implemented in 2016 and has served us well. With discounted AAA rates now at 2.24% and the qualifying rate still at 4.79% I would say that we still have a great buffer in place to protect consumers from rates rising too quickly.

I look forward to hearing from you in regard to your mortgage needs.



p.s- You can click on this link to start the process whenever you are ready. Schedule your meeting with me here.

p.s.s- I should tell you that I am licensed in Nova Scotia, Ontario(M18001555) & in British Columbia(BCFSA #504098).