Canada Banks easing qualifications for conventional mortgage loans & apartment market vacancy rates:
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Bank of Canada likely raise interest rates by 0.25% in July, and as much as a further 1.5% by Fall. As investors, get yourself pre-approved to the current low interest rates. Last month, Scotiabank lowered its conventional qualifying interest rates, and last week FirstLine(a division of CIBC) did the same. Lower qualification rates make it easier for borrowers to qualify for variable & 1-4 year fixed mortgages. Whereas big banks have been using posted 5 year fixed rates to qualify shorter-term conventional mortgages.
Major banks are making it easier for those with at least 20% down qualify for a mortgage, according to a recent report in Mortgage Broker News. These qualifying rates are for those who do not require Canada Mortgage & Housing Corporation mortgage insurance (or private insurance) for high-ratio loans.
Those thinking of getting into the B.C. apartment market needs to know Metro Vancouver & Victoria cap rates are less than other part of B.C. The typical cap rate for recent apartment building sales are in the 4.6% range in Victoria. Average rents in Victoria are $1,024 for a 2 Bedroom & $806 for 1 Bedroom from a year ago. The current vacancy rate is 1.5%, the 6th lowest in Canada n expects to fall to 1% this year in the capital city. The cap rates will remain among the lowest in Canada. In order to have higher cap rates, investors might want to consider outside the Metro Vancouver but the vacancy rates are higher. Prince George is around 7%, Abbotsford & Chilliwack are at 6.5%, Squamish has a 5.2% vacancy rate and much of NorthWest B.C. & the Cariboo in double digits.
If you wish to know more, please contact me at 604-412-5860 or tinamak@tinamak.com
Tina Mak Personal Real Estate Corporation
Your Vancouver Radio Realtor
The Bridge from East to West since 1992
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