There are two very contrasting theories doing rounds about the real estate bubble burst. Some experts say that the good times are over and now it’s time to pack our bags and move to the properties we bought in hope of selling them one day. On the other hand are some enthusiasts who say nothing of the sort is required as the bubble about the real estate is a myth and probably just a phobia created by the myth.
There is no certain way of saying what will actually happen in the coming years but a little speculation will make things clear. If you take a look, there might be too many listings on MLS Burnaby.
The Interest Rates
Monetary Policies demand that the interest rates are varied time to time to control the capital inflow or outflow. This is absolutely imperative for any growing economy. It is done in order to actually make the consumers save some money. Believe it or not but when the prices go high, except for select few, many consumers tend to not spend money on that product and would want to wait till the prices come down again. This helps in avoiding unnecessary consumerism and the slump gives time to economy to adjust.
The Rate Of Increase
The fact is that this rise in interests is the very factor that will keep the bubble from bursting. Now consider this, if you were asked to shell out $2000 tomorrow for a particular service, let us say, lawn mowing, would it not seem very drastic? But if you were to pay the same $2000 over the period of six months in order to keep your lawn orderly, is it still drastic? No! You are still paying though but somehow the cost does not seem to affect you as much. This is the same with the rate of interest increase. The rates are increasing gradually and this is a well thought out plan to help avoid inflation or too drastic economic fluctuations.
The Real Estate Bubble Myth Contribution To The Burst
Part of the problem about the bubble burst arises from the fear of bubble burst itself. People who do not understand the economy well are bent upon trying to prove that the prices are going high because there is a burst. This leads to a scared lot of buyers who do not want to invest anymore and the demand goes spiralling down. Perhaps this is why West Vancouver real estate is so expensive.
This phenomenon that leads to the problem that everyone was scared of.