Below is an article written by James Harrison at Mortgages.ca. Their information will be left below
As you have all heard in the media, the prime rate has gone up by 0.50% (as of April 13th), the biggest single-day increase in over 22 years.
Why?
Unfortunately, the War in Ukraine has accelerated inflationary impacts, so the government has been forced to increase the prime rate sooner than expected or anticipated.
It seems like so long ago since real estate buyers in the GTA have felt a sense of calm. Earlier in the year of 2022, bidding wars have taken over the real estate market, where the low inventory of homes and the low mortgage interest rates were forcing buyers to compete with a number of other aggressive buyers in order to give every penny imaginable just to secure a home. It seemed like owning a home for many people was becoming less and less of a reality.
The Year 2022 has started off very aggressive when it comes to home prices in the GTA, and especially in pockets like Vaughan, Brampton and ..well everywhere. Houses have increased in price by $200k+ in the matter of just a few months, and that is due to the shortage of inventory in the housing market and buyers showing their desperation. The group that is MOST affected from this market would be the first time home buyers.
If you are an investor looking to buy real estate at a cheap cost, this year of 2021 has not been an easy year for you. Cashing out on your investments, this is a GREAT year. Purchasing investment properties, the inventory has just been too low.You may be a residential real estate investor or a commercial real estate investor so there will be different things to look for when searching for the right investment. Not every investor is looking for the exact same thing in a property, but most are looking for a similar outcome; Purchase Low to Rent High.
Houses that were for sale in the early months of 2021 look to be the best time so far to have sold this year. Many properties that are for sale this summer are still selling for great prices, as many homes in Vaughan continue to do fantastic for sale prices . However, there seems to be a feeling of calmness in the market place, which is a breath of fresh air for many buyers looking to get into the market.
There was a time when housing supply equalled or exceeded demand, which allows the buyer to insert a clause requesting to arrange mortgage financing – this is called a “condition of financing.” How long that condition is would be dependant on the buyer and the advise from the real estate advisor.
Selling your home can be an emotional roller coaster. Many sellers are taking advantage of this booming real estate market in the GTA, as prices in 2021 have jumped more than 10% in many areas, from just a few months ago. The shortage of housing inventory can be heard across North America, as it seems like everyone is dealing with this same issue. In an average market, homes would be priced at a number that the seller would consider selling for and wait for offers to come in.
If you are a buyer struggling to afford a home in todays market, paying way above the expected price may NOT be the right thing to do, even though it feels like it is the ONLY thing to do in this real estate market. Vaughan real estate is booming, and do are areas like Bolton, Innisfil, Oshawa, Milton and ,well, pretty much everywhere… leaving everyone, including banks and lenders, not sure what properties are really worth.
If you are looking to buy real estate in the Greater Toronto Area in 2021, or anywhere in North America for that matter, get ready to compete. Many buyers looking to buy Vaughan real estate and surrounding areas find themselves with no leverage when negotiating the price, mainly because of the amount of competition there is. A lot of this has to do with the low interest rates that are currently feeding the real estate market due to the COVID-19 Pandemic. In order to keep the economy up, interest rates needed to be dropped.
