|
|
LandLord’s Market?18 05 06 20  24
-------- Finally?
Interest rates have been steadily climbing. A few years ago it was easy to get 5% fixed on a real estate mortgage – I did! Today, it is back to the mid 6’s. It is still low compared to the 7.25% that I had on my first mortgage ever, but when you recognize the doubling or tripling of house prices since then you start to see that it is getting difficult for people without cash to buy a property. (It used to be common to amass 20% of a property price before buying it, as opposed to the 5% down payment loans that are common nowadays). Some market analysts have been arguing that the reason for the surprise inflation observed was a rise on rents, a rise on rental property demand, or simple the fact that people can’t buy properties anymore and have to rent. ”Housing prices do not figure directly into the CPI data, Vitner explains. The government recognizes that homes are not only shelter, but assets that add to individuals' wealth, just as stocks and bonds do. “This is again a proof that buying a house with a fixed interest loan is a hedge against inflation – assuming you do not make the common mistake of maxing out credit cards and paying them down with a home equity line. Could it be that after half a decade of housing boom, we Landlords can enjoy a steady stream of potential clients for our properties? A rise in fair rental prices could be welcome as well, as right now we do not break even in at least one of the properties. |
For a long time it has been a home buying market. Sellers where having a party, but so did buyers – or I should say “lenders”. Flexible lending schemes and low interest rates made it possible for all but those with the worst credit and financial conditions to be approved for a loan that enabled them to buy the house of their dreams.