My existing clients — let’s call them Peter and Krista to hide their identities — are a newly married local couple in their late 20s who came to me in January looking to get pre-approved for a mortgage to purchase their second condo in North Vancouver. 

They both earn an annual income of $120,000 between them and have $50,000 saved. The net proceeds on the sale of their 1-bed condo, which they bought in 2018, will make up the remainder of their 20% down payment.

At a 5-year variable rate of Prime minus 0.95000 %, they qualified for a mortgage amount of $560,000 plus their savings and net proceeds of $135,000, giving them $695,000 to purchase a 2-bed condo with. The estimated monthly principal and interest payment (not including property taxes and strata fees) would be approximately $2,100. Peter and Krista immediately got a recommended realtor on their side to help navigate North Vancouver’s irrational exuberance 2-bed condo market.

After being outbid by $150,000 at the peak of the market in January, Peter and Krista felt discouraged and decided to sit on the fence and see how the Spring market would play out.

They viewed seven other properties between January and May, but found the condo of their dreams just outside of their search area before their pre-approval expired. By then, the froth had come out of the Metro Vancouver housing market and they were able to secure their new condo for $672,000 – $27,000 below asking.

Within a week of their offer being accepted, they put their 1-bed condo on the market. A week later, they had an accepted offer of $512,000 – $13,000 over asking. Between the two transactions, they were able to double their usable square footage and got a large backyard for $160,000 more than what they sold their 1-bed condo for in the same area.

Even in a cooling housing market — and depending on the property type and location — there is an opportunity to save money on the buy-side and net more on the sell-side. And if you are buying high and selling high and are looking to hold onto the property long-term, you don’t have to worry about trying to time the market.

If you are thinking about upgrading to a large property like Peter and Krista did, feel free to contact us to learn how much home equity you have and what kind of mortgage payment you can comfortably fit into your budget.