Have you been postponing to own a house? Your concerns about the price of a home in Canada are valid. In 2021, house prices started skyrocketing amid the pandemic, instilling panic among potential homeowners. Statistics reveal that Canadians witnessed a 26.6% rise in the House Price Index during that time – the highest ever recorded. Since then, there have been changing and unpredictable property ownership trends.
But hey, things seem to be taking shape. In 2022, despite the Bank of Canada increasing their policy rates, there was a 12% decline in home prices. That’s not significant enough, considering the previous rise, right? Well, it’s a clear indication of better days. In fact, Canadian real estate experts argue that prices might continue declining in 2024 and beyond.
But the main question is, “Is this a good time to buy a house in Canada?” We have some good news for you. This article expounds on critical concerns you must prioritize to buy a house anywhere in Canada – from Toronto, Alberta, to Vancouver and beyond. Buying property should no longer be considered an extreme sport!
Buying a Home for the First Time? Consider These 5 Market Concerns
Congratulations on the decision to buy a house! Getting your finances in order up to this point isn’t a walk in the park. It’s a journey full of turns and twists – with a share of immense sacrifices. But that notwithstanding, it helps to understand the market to make a purchase decision that you and your loved ones will appreciate.
Note this – it’s only a good time to buy a house if you consider these essentials:
Current Rate of Closing Home Sale
Picture this: You’ve browsed a listing and identified a fantastic house in your dream location. Rather than taking action immediately, you decide to take a day to get your thoughts ready, only to call the seller later and realize that the home is gone. It happens – some houses sell immediately after appearing on the listing.
In instances where sales close faster, home prices tend to get high. However, when you notice the vice versa, get ready to make a bidding move. Statistics reveal that in October 2023, properties up for sale in Canada recorded a 2.3% decline – but still, moving forward, there’s no significant increase in sales.
Homes for Sale Demand & Supply Dynamics
Demand for homes comes from many interested potential homeowners. That leads to an increase in prices because sellers have the field day. In some instances, the properties listed for sale are few, and many want them, resulting in a high demand and price increase.
You can also tell the demand by observing the sales made in a certain period and comparing it to the new listings in that period. More sales than listings mean you’ll likely have to dig deeper in your pockets.
Pricing Based on Seasons
Yes, you read it right! Seasons greatly influence home prices. If you’ve been actively studying the Canadian market, you’ll realize that prices vary across winter, summer, spring, and fall. Why? The number of homes and tagged prices change from season to season.
For instance, home prices have consistently increased in summer and spring. That’s because of the increase in listing and interested buyers. Expect aggressive bidding wars and less room for negotiation during these hot housing seasons. The enticing home landscapes and excellent weather make home hunting massive.
On the other side, winter and fall are a bit slow because both buyers and inventories decrease. But again, it’s easy to find a good deal in winter and fall because most sellers are ready to sell and accept negotiations. The challenge is that, during this time, there are limited home options.
The Interest Rates on Mortgages
It’s now in the public domain that the nation’s central bank – the Bank of Canada – has its interest rates at 5%. That’s a significant rise when compared to the previous years. So, does this matter when it comes to interest rates on mortgages? The truth is it does.
A rise in interest rates means increased monthly payments and this contributes to more payment on the loan in the long run. Financial experts argue that the interest may rise further in the coming years. But if things turn around, you might end up paying less – it’s a gamble.
The Home Prices Trend on the Ground
How are the house prices currently where you live? There are places where the house prices are falling and others where the prices keep fluctuating – rising for a few months, then declining later. It would help to understand the price trends and dynamics of the region you want to invest in.
For instance, 2023 statistics from the Toronto Regional Real Estate Board indicate that residential home prices had a 1.4% rise, but as the year ended, the prices started to fall.
The Verdict: Access Your Potential & Make a Move
Is now a good time to buy a house in Canada?
With an understanding of the market considerations and current economic situation, it’s easy to decide. Indisputably, mortgage rates continue to grow, and aspiring homeowners must go over and beyond to own a home.
But look at it this way – if you get a chance to buy a house now, you’ll boost your equity, which will come in handy whenever you need more financial assistance. More so, with the predicted decline in mortgage rates in a few months, more buyers will flock to the market, which will significantly affect the prices. Why wait when you can do it now? Make that home purchase, and you’ll be happy you did!
Consider this: Have a budget and all the necessary home purchase essentials, do your research (more on this later), then go for it. Be realistic with your home purchase budget and ensure you can comfortably afford the home you target. Knowing your overall financial health isn’t a bad thing after all. It comes to your advantage in the long run – remember, you must maintain home ownership.
Do More Research: How to Secure Good Prices for a Home
Don’t settle for a particular house or loan because you have no choice. Instead, research and learn about things that revolve around housing in Canada to make informed and concrete decisions. Market research is the primary source of information on interest rates, economic trends, and property trends – the vital parameters in scouting, negotiating for the price of a home in Canada, and buying it.
Make use of the following to research and make sound investment choices!
- Keep an eye on the local real estate listing websites.
- Know what mortgage rates the lenders offer from time to time.
- Make use of social media pages that focus on real estate
- Be a friend of online property news – read real estate blogs, websites, and news sites.
- Engage proven real estate and lending professionals for insights and good deals.
Common Questions About Buying a Home in Canada Now!
Can I Buy a Home in Canada with a Bad Credit Score?
Absolutely! You only need to explore online financing options like the BHM for proven results. Bad credit, no credit, or bankruptcy comes with diverse challenges, but it doesn’t mean you can’t buy a home. Let’s get you sorted!
Can I Still Secure a Mortgage in Canada with Fluctuating Rates?
Yes, you can! While mortgage rates fluctuate, a reputable lender will help you enjoy favorable terms. BHM enables you to get a mortgage that aligns with your financial goals and risk tolerance.
How Do Mortgage Rates Affect My Home Purchase in Canada?
Mortgage rates will determine the cost of homeownership. That’s the monthly charges and the overall cost of a house. Be on the lookout for current rates and market trends to know when to close a deal. Also, consult online quick loan lenders to secure the best mortgage deals.
What’s the Current Landscape of Housing Prices in Canada?
The Canadian real estate market isn’t static. Prices vary based on economic times, market demand and supply, seasons, regions, Bank of Canada interest rates, buyers and sellers ratio, etc. Read about the latest market trends, prioritize research and work with professionals to navigate the market.
How Can I Own a Home Despite the Growing Economic Constraints?
The answer is simple – go for the right lender and have a strategic plan. BHM financial advisors and mortgage professionals will tailor a solution that suits your financial situation and unique circumstances for affordable monthly payments.
Ready for a Mortgage? BHM Financial Group Will Help You
Do you know that we’ve been helping thousands of Canadians with no and bad credit get mortgage loans for almost 40 years? We understand the need for seamless first-time and subsequent mortgage loan applications, so we don’t bother with your background, age, or credit history. Apply today for prompt mortgage approval – from $1000 to $50,000.