It's time to invest in a Calgary condo market!
Are thinking about investing in condominium living?
You may not know it, but there are several reasons why it’s an excellent time to enter the market.
1. The possibility of rising interest rates.
Experts say that interest rates are set to rise – and stay that way for some time. While Canada slowly recovers from the recession, bankers and market analysts are looking for interest rates to rise incrementally over the next two years. A canadianmortgagetrends.com survey of big bank economists suggested that over the next 19 months, the prime interest rate will more than double, going from the current 2.25% to a high of 5.25% (Survey posted May 13, 2010). What this suggests is that if you are not locked into a longer term mortgage, your payments will rise substantially.
Smart investors know that rates today are at an all time low and that locking in will create stability in property cash flow over the long term.
2. The new Canadian mortgage approval rules.
The government’s new mortgage qualification rules, enacted last month, have created challenges for investors buying investment property. Investors must now have 20 percent as a down payment before they can qualify for CMHC approval. This extra downpayment “cushion” will actually help with cash flow and prevent many of the speculators who were looking to “leverage” themselves with a lower downpayment.
3. Take advantage of the “Urban Living” trend.
From downsizers to young professionals, the trend is and will continue to be the inner city and downtown core growing in numbers. “People want to live close to where they work”, says Ross PAVL, a Re/Max realtor who specializes in downtown condo projects. “The trend is there in other large and growing downtown metropolitan centres and Calgary is no different. Now that we’ve broken the 1 million population mark, the momentum for downtown growth will continue. Also, as the baby boomer sector ages, the appeal to have a lifestyle free from exterior house maintenance issues and to get away easily, is definitely on the increase.”
With interest rates at all time lows, investing in this market is still appealing, despite the new mortgage approval rules. Condominium living in the downtown core continues to offer the best alternative to a lifestyle trend that has already proven itself in other key cities like Vancouver and Toronto. Low vacancies in the condo rental market help validate this, especially with newer, more modern condo suites.