Housing Market Spikes - Homeowners Stay Put and Renovate

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It is no secret that the Vancouver housing market is on the rise. Like the mountains that Vancouverites love to enjoy, the price of the average Vancouver home is jetting into the stratosphere. With few options available for families looking to upgrade, homeowners intent on staying in the Lower Mainland are holding on to their precious properties. Instead of buying bigger homes, Vancouver families are using their home equity to improve their current dwellings.

In its second-quarter report, the real estate company Royal LePage claimed that Vancouver is experiencing the largest price increase in the country. Bungalows rose a staggering 14.1 per cent in the last year, two-storey homes 12 per cent and the average condo rose 2.5 per cent.

The Canadian Real Estate Association is claiming, that overall, the Vancouver housing market has increased 25.7 per cent in the last year. Toronto, Canada's second highest real estate market, rose as well; but their 8.7 per cent gain pails in comparison.

With the cost of living rising at a similar pace to the housing market, the average Vancouver family cannot afford to sell their current property and buy back into the market. Instead of moving to a less expensive housing market, homeowners with families are choosing to keep their current homes, often living in spaces that older generations may have considered too cramped.

Favourable school catchments, urban opportunities and extended family proximity are a few of the reasons why families are staying put. Already established in their current neighbourhoods, these homeowners are content to hold on to the value of their home and sell at a later date.

The option that many families are choosing is to use their Vancouver home to apply for a second mortgage. This money is being transferred in the form of a home equity loan. With extra capital available, Vancouverites are improving their current homes through home restoration projects.

On the inside, homeowners are upgrading their dwellings by adding additional bathrooms, redoing their kitchens and finishing their basements. On the outside, expansions are being made to backyard patios, new paint is being applied and gardens are being overhauled. If the only option is to stay, then Vancouverites want to enjoy their homes to their maximum capacity.

These improvements increase the value of the homes, so when it is time to sell, Vancouverites can establish a higher asking price. The capital gained from debt consolidation is being used to reduce potential future mortgages.

The plan for many families is to use their Vancouver home as a retirement package. Once their children are ready to leave, many homeowners look to Vancouver Island for more affordable accommodation. The money they make in the sale can support them for years after they retire.
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