We've all heard of "buyer's remorse", and fear of it can make buyers overly cautious about laying down their home-buying deposit money. But in Calgary's booming housing market, there's a far more likely remorse. Let's call it "missed opportunity remorse".
It's not that there won't be a condominium home available for you to buy in two, five or 10 years. It's just that it could cost you double today's price. Or interest rates might be double what they are today. Or you might not be enjoying the employment you have today, and won't qualify to buy the home that you need or want. In any of these scenarios, you'll suffer "missed opportunity remorse", and I speak from experience.
My own example still has me owning four condominium properties in Calgary, one being my roomy downtown penthouse home, plus three rental properties. But over the past 10 years three other investment suites passed through my hands, and I have missed-opportunity remorse that I sold each of them. Sure, I made money buying and selling, but if I'd kept them their value would again be growing after the downturn of 2008, and the mortgages on each would still be declining. Let's see, on the $20,000 I put down per suite, that would be an annual return of 30% or 40% per year.
Those who are cautious about buying may lack perspective on the current opportunity in Calgary's housing marketplace. When I bought my first home in 1980 my initial mortgage interest rate was 18.5%. Today's first-time buyers who were not yet born then won't realize how good 4.5% mortgage interest rates look to us older folks. But to me that sounds so good I'll take two, or maybe even three such mortgages!
There are other voices than mine to consider. Listen to a Calgary Herald's headline, "Homes most affordable in Alberta", it shouted, leading into a story quoting RBC Financial Group's analysis of home affordability across Canada. The analysis blended local home prices, interest rates and local average income to arrive at a home-affordability index. The number is the percentage of gross family income required to make total monthly housing payments, assuming a 25% down payment and a five-year fixed-rate mortgage. The numbers: 27.2% in Calgary, 31.4% in Montreal, 42.5% in Toronto and 47.7% in Vancouver.
The author enthused about Alberta's positive home-buying environment. "It's hard to get much better than what you have," he said. "(You have) some of the strongest income growth in the country, and some fairly strong house price growth, and still the best level of affordability in the country." So it may be time to stop fretting about possible buyer's remorse, but rather dread the other potential remorse; that of missed opportunity. Call your lender, quick. Then if you live in Calgary, call me.
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