As Canada looks to new political leadership and a general election later this year, there’s no denying the lack of affordable housing has weighed heavily on the Trudeau Government.
Property values are more than 30% higher than in April 2020 – a direct consequence of government economic stimulus during the pandemic and a near-zero benchmark for interest rates.
According to data from the Canadian Real Estate Association, some folks have seen their mortgages rise up to 40% since the pandemic. On the upside, those who own their home still have an asset that has significantly increased in value. Higher mortgage costs have not caused values to drop dramatically.
Of course, now, we’re in a new era with inflation at just 1.8% and the base mortgage rate sitting at 3.25%.
As an experienced real estate agency, we understand affordability remains a challenge for some, particularly for first homebuyers.
It was disappointing when the First Time Home Buyers Incentive was scrapped in March last year, as it made an important contribution.
Today, we’re seeing buyer confidence begin to emerge thanks to the new 30-year mortgage available to first-time buyers, lower interest rates and more properties coming onto the market..
If you’re currently seeking to upgrade or purchase your first home, here are some guidelines to help you achieve your goals:
Due Diligence: It’s essential to maintain a strong research discipline and understand the buying dynamics in your target area. For owners, identify the likely buyer interest in your existing home by talking to trusted agents. Good research ensures you make informed decisions. And we’re happy to help you.
Neighbourhood Opportunities: If prices in your target areas are too rich, cast your net further afield. Explore nearby areas or suburbs that might offer similar amenities but with lower prices. If you have a buyer’s agent, they’ll identify suitable candidates.
Refine Your Needs: It’s a smart play to define must-haves and nice-to-haves for your next property. In a competitive market, you might need to compromise on some features to stay within your budget.
Cash is King: Knowing your borrowing power lets you act fast when you find the right place. It shows sellers you’re a serious buyer. Shop around for the best rates and pre-approval offers.
Recruit Experts: Talk to local agents in your target areas. Find out if there are any off-market opportunities, and get a sense of the demand for the types of property you’re seeking.
Offer with Conditions: Include conditions such as the result of the home inspections or the confirmation of finance to protect yourself. Think about your negotiation strategy ahead of time.
Set a Ceiling: Avoid bidding wars. Set a maximum price you’re willing to pay and stick to it.
Be Persistent: Don’t get discouraged when a deal doesn’t work out. There are always more properties. The right opportunity will come along.
Think Long-Term: Don’t rule out a property with good “bones” because it needs cosmetic work. If you plan to stay in your home for several years, minor renovations can be done later.
Be Responsive: When selling your current home, respond promptly to your agent’s calls, emails, especially their requests for buyers to inspect your property.