Home ownership is still a Canadian dream. 2017 we saw some new strategies in place to help cool an extremely overheated market. These strategies, in some regard, were considered to be quite extreme, and no one knew what the outcome would be.
The biggest fear was that no one would be able to buy a home anymore. With an increased demand for housing, our rental market took the brunt of unrealistic rent increases. The new average rent for a 1 bedroom apartment in Toronto is well over $2000 per month.
For most, this means difficulty in saving for their dream of owning a home. For others, they have the money saved, but the concern is that they won’t be able to afford the home they want as they will now qualify for less.
After such a high market these last several years, it wouldn’t take much of a drop to seem like a crash. New policies were imposed to help cool off and stabilize house prices. Selling thousands and thousands over value was not realistic or sustainable. We have seen our market undergo a massive correction, and in some areas that correction is still taking place.
Over 10 years ago, our interest rates were sitting at an average fixed rate between 5 – 7%.
Today, our prime rate is 3.95%, with our benchmark rate 5.34%. Today’s benchmark rate is really no different than qualifying over 10 years ago at the prime rate. People bought then, and they will buy now. And 2019 will see most likely see our interest rates rise again.
What’s the bonus of this? Well, although the laws and policies are stricter in the sense of how much you buy, the first upside is that you are not paying the benchmark rate – you are paying the lower posted amount with your financial institution. I’ve seen them as low at 3.29%.
It means that you are not mortgage poor. It means that if the rates are rising, then when it comes to renew, you can still afford your mortgage.
The second upside of this? Our real estate market has corrected and cooled off. This means that homes are now selling a little softer. So, why wouldn’t you pay a lower amount for your dream home now? In a few years, as it always will, the market will pick up and the value on your home will increase.
This is a great time to buy a home – houses are priced low, posted rates are still great rates, with the promise of building equity into your future. With stocks, some investors like this market – buy when it’s really low, and wait for it grow in value, and sell high. The same can be said with real estate.
Still not sure? Then let’s start with a Home Health Checkup. If you are thinking that you would like to buy now, or in the next year or two, then let’s talk. I work with a great group of experts, and our goal is to help you achieve your dream of home ownership.
Our process is quite simple:
- How is your current financial health – what can you buy today?
- Not ready to buy now? Then let’s set up your plan to get you moved in over the next year or two.
- Review your dream home – where to do you want to live? How big or small is your home?
- Do you need to sell to get that dream? I will give 1.25% of my commission to help you invest into your next home. That can be several thousand dollars you didn’t even know you had!
We will set up a home buying plan that will have you moving into your Dream Home much sooner than you think! Reach out today and let’s start.