Thinking about buying a home? Well, stop thinking and start looking. The stars have aligned in the Canadian real estate market, creating what many in the industry are calling “the perfect storm” of market potential. From condos to single-family homes, now’s the time to lock in a mortgage rate and enter the world of real estate investing.
Why the Time is Right
1) Mortgage Rates are at Historic Lows
Mortgage rates can’t get any lower. Four and five year fixed-rate mortgages are already at 3 percent – a rate that was previously unheard of. This latest fixed-rate is actually lower than the variable rate that most Canadians have been paying for years. Rates have nowhere to go but up, so don’t miss your chance. Get pre-approved for a great mortgage rate today, or refinance your current rate to cut your interest payments.
2) Canada is Climbing the Ranks
Failing banks, corrupt governments, growing debt loads – it seems like almost every single country is having trouble bouncing back from the global recession… except Canada. Granted, we’ve still got our fair share of economic troubles, but even so, Canada’s stable banking and political environment, along with our steady real estate market, make for great investment opportunities. Canada is currently a safe haven in a volatile world, which is great when you’re looking for a new place to call home.
3) Increased Immigration
Canada is becoming an attractive option for international immigrants, thanks to all that’s mentioned above. And these aren’t just your average middle class residents – we’re talking wealthy investors. As such, Canada’s urban real estate markets are likely to remain competitive for quite some time.
4) Lack of Downward Pressure
According to the CMHC (Canadian Mortgage and Housing Corporate) over 99 percent of Canadians pay their mortgage on time. Compare that number to our American counterparts, where over 7 million homes are in foreclosure, and it’s easy to see why our market remains strong even during a global economic recession. This lack of downward pressure on prices should lead to a steady housing market throughout the next year.
5) There are Consequences
There’s a reason why Canadian homeowners rarely default on their mortgage: recourse. In Canada, almost all mortgages are in recourse, meaning if you don’t pay and there’s a shortfall, the lender can sue you for the difference.
6) Income vs. Home Prices
Both the U.S. and U.K. markets tanked when home prices soared above the nation’s median income. Many media sources are reporting that the Canadian economy is currently hovering at this same point. However, if you take a closer look at Canadian median incomes and the median cost of homes, you’ll see that things aren’t nearly as bad as they seem. Furthermore, income-to-price ratios are highly unreliable in the first place – a person receiving social assistance is not going to purchase a home, yet their income is still included in the ratio, skewing the results.
7) It’s an Election Year… in the U.S.
As strange as it may seem, the U.S. Presidential race will help keep the Canadian real estate market strong. American politicians will do whatever is necessary to keep their markets from tanking, which in turn will help buoy our position as well. While small, the U.S. is already showing signs of recovery,
The time to buy is now. Contact your mortgage broker today to start planning for your future as a homeowner.