You have been making plans to buy a home when the COVID-19 hit Canada. Now, you’re wondering whether to go on with your plans or wait. The property market around the country is changing rapidly, but with record-low mortgage rates, now may be a great time to purchase a home. Here’s everything you need to know.
Needless to say, the Coronavirus has had long-term health and economic consequences. Consequently, the housing market started on a cooler footing last spring than in 2019, with official figures from the CREA showing sales of homes in May dropped to a record low for the month of May since records began in 1996. In spite of the massive drop in home sales as result of the pandemic, however, nationwide house prices remained fairly constant.
Following a major fall in April, sales increased significantly in May. The April-to-May increase was witnessed across Canada. More potential buyers re-entered the market, and more home sellers started listing their properties. With more sellers and buyers reentering the market, competition is increasing in many parts of the country. In Vancouver and Toronto (the country’s largest housing markets), buyers and sellers were equally matched in the month of May, whilst in Ottawa and other Southern Ontario property markets, competition for homes for sale was fiercer in May than in the previous year. In contrast, buyers had more leverage than the sellers in Edmonton, Fraser Valley, BC and the surrounding areas due to demand and supply factors.
Considering how rapidly conditions are changing in the housing market in Canada, potential homebuyers may be asking, “Is this an ideal time to go house hunting?”
With mortgage interest rates at record lows, now may be a great time to buy. The following are some important factors to consider when making your decision.
Consider your financial situation and lifestyle
For many people, deciding to purchase a home is not always all about money. In other words, prospective homeowners should make lifestyle changes and move – whether there’s a crisis or not.
Think about why you need to purchase a home to start with. Maybe you have had a change in your family or relationship or are expecting a new baby. Perhaps you would like to be near to your family, have easy access to transportation networks or be in a reputable school district. These are some of the reasons people decide to move. If you began planning for a home before the coronavirus pandemic, think about how the pandemic has affected those plans.
If you have the finances to buy a home, then now is a good time to buy thanks to the historically low rates. Once you’ve figured out why you want to move, think about your lifestyle and how it may change. In any case, you’ll be staying in your new home for a long period, so you should consider whether the property you’re interested in is a good match for your lifestyle both now and in the days to come. If you find a home that suits your needs, in a location you like, and are happy to live there for a few years, go for it.
Consider the local housing market
Once you decide to proceed with your home search, you should consider how the local real estate market is currently shaping up. In any case, buying a house is a huge responsibility, and one of the greatest investments you will ever make.
With the pandemic still spreading, local and national real estate groups, many reputable financial institutions, housing corporations and economists have predicted the impacts of the coronavirus on the real estate market.
As you would expect, no two predictions are similar, and this shows how unpredictable the coronavirus is. For insurance, one housing corporation has predicted that the property market will witness a ripple effect of the COVID-19 pandemic, with sales volume down by around 19- 29 percent and prices dropping by 9 -18 percent from pre-pandemic levels. Another report from a different financial institution states that property prices in the greater Toronto area could increase by 8 percent by the end of the year.
Although accurate data from financial institutions and real estate corporations can offer valuable insights into how the property market is fairing, the property market is regional or local.
The kind of home, the location you desire, and your financial ability will all determine the price you will have to pay for the property. For instance, high-level statistics show that the housing market is very competitive in Southern Ontario. In these markets, though, the first time home buyer section (where properties are priced below $700,000 or so) is the most competitive, whilst competition for higher-priced properties is less intense.
Partnering with a trusted real estate agent can be a great way to navigate the market and understand what kind of property suits your budget depending on your needs and circumstances. A reliable real estate agent can give you all the information, facts and data that you need to make a wise decision that you’ll be happy with today and in the days to come.
Ask potential real estate agents a lot of questions to ensure they know the area you’re interested in well. The agent should also tell you how many people they have helped buy or sell a home in the area. This will help you measure their local knowledge and expertise. You may also want to ask how much referral business they receive in order to know how effective they are.
Keep in mind that buying a home is a long-term investment
Lastly, keep in mind that buying a home is a long term decision. If you want to make speculative investments on a short term basis, doing that now is risky. Moreover, real estate has other costs that increase the sale price. These include property transfer taxes, real estate agent fees, legal fees and probably moving costs, among others.
Once you have considered your individual requirements against your budget and circumstances, and have considered the local housing market, then go ahead and make your purchase if you think that everything ticks all the right boxes. If you can purchase a home, and hold it for a long time, then jump in and take the necessary steps on the road to homeownership!