The Canadian real estate industry is still going strong and prices continue to surge as demand increases, mainly because of historically low-interest rates. The Bank of Canada (BoC) has stated that fixed rates will persistently rise as it ends Quantitative Easing, and variable mortgage rates will increase as early as March 2022. The BoC is also meeting today (December 8, 2021) to discuss monetary policy and the overnight lending rate, but experts agree that it will likely not increase in the face of the Omicron Covid-19 variant and its many unknowns. The inevitable rise of mortgage interest rates continues to create a strong urge for prospective buyers to get in on the action, driving up the cost of property in cities like Toronto and Vancouver, where the average price is currently around $1.2 Million (some say an insane price for your average townhouse or condominium). Not Enough Supply In Canada's Biggest Cities. According to the Calgary Real Estate Board, sales are up 46 percent from just one year ago, and new listings cannot seem to keep up with the number of buyers popping up. The Real Estate Board of Greater Vancouver has also expressed there is massive demand that, unfortunately, is not in line with the number of properties currently for sale. The main issue that has tortured prospective buyers is supply, which is minuscule compared to how many people are actually looking for homes. The imbalance between sellers and buyers causes property prices to rise quickly, like in Ottawa, where supply has dropped by 27 percent as of October 2021. It is also responsible for bidding wars and blind bidding which seeks to purposely inflate the cost of property. In Toronto, for example, the cost of real estate has increased about 22 percent year over year, whereas new listings are down 13.2 percent. Getting a pre-approval can provide a type of "interest rate insurance" while you look for a home. Pre-approvals can protect you from rising interest rates because mortgage lenders can guarantee you a rate for four months while you shop for a home. Low rates can also be used for things like debt consolidation through refinancing, helping you save a ton of money on high-interest credit card debt or other loans that eat into your cash flow each month. If you're thinking of getting into the market, a pre-approval can offer you a clear picture of what you can comfortably afford while leaving you prepared to put forward a stronger and more successful offer. We specialize in residential mortgage financing for all types of borrowers, including those with bruised credit, self-employed individuals, or individuals with unique income. Get in touch with us today. Call or write or book a one-on-one consultation. Sarah ColucciSarah is a senior mortgage consultant, working with Mortgage Edge, Canada's largest independent mortgage brokerage.
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By: Sarah ColucciSenior Mortgage Agent, Lic. M14000929 Categories |