For many, home ownership is considered to be a rite of passage. Whether it’s a house or a condo, people of all stages of life want to own their own home. Currently, 2 out of every 3 Canadian households own the home they live in and real estate is still considered to be one of the best long-term investments to have in your portfolio.

However, with housing prices the highest in all of Canada, the challenge that many Vancouverites face is not what to buy but when to buy. Some prospective homebuyers feel pressured to “get in” before they are priced out of the market in order to take advantage of historically low interest rates. Others prefer to sit on the sidelines and wait the market out.

So, say that you’re in a position to buy, should you buy a home now and take advantage of ultra low interest rates, or should you wait until housing prices ease from their current levels? Here are some key facts to consider:

1. The home you want now may not be available in the future. If you have found the perfect home, in the perfect location and are planning on keeping it as your principal residence for a number of years, the benefits of buying now may outweigh market fluctuations. For example, if you are a family looking to get your children into a great school for the fall, your motivation to buy will be location and immediate availability. To avoid disappointment or undue stress, it would be prudent to start the home buying process now, as the demand is always high for homes near great schools and neighbourhoods, you may have a property that needs to be sold, and you would want to leave enough time to get your family settled before the school semester begins.
2. The current economic climate favours buying now. Economists have been warning Canadians since 2009 that these record low interest rates won’t last much longer. Recent signals from the Bank of Canada point to interest rates rising later this year and into 2013. What this means is that today Canadians have never had more borrowing power. This is a compelling reason to buy now in order to take advantage of the low cost of borrowing that may not be available in a year or two as you will ultimately get more home for your money.
3. Sitting on the sidelines means that you aren’t building equity. And besides helping to build equity, homeownership also allows you to hedge this equity against inflation as housing prices float with the current market. Getting into a home also means moving up. The best way to climb the real estate ladder towards your ultimate dream home is by using your accumulated home equity and trading up into a newer or larger space over time.

Assessing the right time to buy can appear to be a daunting task, but by understanding your individual real estate investing goals and timelines you can let your homeownership needs today drive your buying decision tomorrow.

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