The Real Estate News In Canada

Finding A Buyer For The Property

Published on November 26th, 2018

The Canadian real estate market seems to be getting back to where it was initiated prior to the slowdown a few years back. Despite the new regulations, the current trend in prices remains unshaken and this is good news to property investors. As a matter of fact, the demand for new homes is pushing developers to come up with different types of homes to meet the buyers’ needs as indicated in for new home listings.

According to Royal LePage report on 2018’s housing market in Canada, home prices will not decrease even if the new mortgage rules come into effect at the onset of 2019. That could be the main reason why various housing markets in a number of cities within the country have been showing some promising results.

Home prices have been on the increase and by the end of 2019, it is projected that the rise will go as high as 4.9%, which translates to $661,919. This estimate is based mainly on the composite price index which measures prices for homes in 53 cities.

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But the impact brought about by new regulations will not be exactly nil. At some point, the new measures are likely to slow down the real estate market as buyers get to adjust their finances as well as expectations. This implies that at the time when buyers will be acquiring property with a down payment of let’s say 20% or even more, they will face some stress test.

The stress test will ensure that the buyers would be in a position to cope with increasing interest rates and this is a measure put in place for those homebuyers who would require mortgage insurance due to their smaller down payment. Also, tougher rules will be imposed on those looking to apply for refinancing or changing lenders when it comes to renewing their mortgage.

On the other hand, those buying detached homes in places such as the GTA will have to be choosy if they would want to enjoy the greater selection of different properties on the market so that in the long run, they won’t face a lot of competition from other home buyers.

However, in other Canadian cities, the rules could have some devastating setbacks for first-time buyers as well as those with smaller budgets due to the likely increase in demand for new properties in the market, especially in the condos segment.

While demographic and economic fundamentals still remain stronger in most cities, the changes in the policy for the year 2017 and 2018 have had a greater impact on the buyer’s’ ability to have an access to the mortgage financing in a number of housing markets. Actually, the latest federal mortgage stress came in place to keep the sales in housing in check and it is expected to be successful through to 2019.

However, the national price is projected to go down by 2.8 %( which is $ 494,900) by the end of 2018. The forecast has already been revised in relation to the slowdown for sales activities in British Columbia. Even though the price on the average has been skewed by the reduction in sales for luxury home markets, nearly half of Canadian provinces are poised to see a price gain in 2019.

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In the meantime, home prices in places such as Montreal are on the rise following the steadily firming of the real estate market conditions. For instance, the average cost for homes in Montreal goes for $ 465,159 which is an 8% increase year-over-year, for the condo, the average cost comes to $304,000 translating to a 5% increase year-over-year and the average plex goes for $540,000( an 8% increase year-over-year).

In the real sense, the changes in the mortgage rules and interest rates will not have a negative impact on the growth of the Canadian real estate market as many people expected. What happened a few years of the housing price slowdown was just an adjustment to the new changes that were taking place.

As time passes by, the real estate market seems to be getting back to where it was and the future looks promising. In fact, the demand for homes is still high as the economic and demographic factors keep on showing an exponential growth in Canada. For property investors, this sounds like good news and the right time to consider investing in the Canadian real estate market.