How’s the Market? What’s Ahead for Real Estate in 2019?
While no one can predict the future with certainty, there are signs that the Canadian housing market is starting to stabilize after a downturn in the first half of the year. Experts forecast that in most areas of the country housing prices will remain high, rents will rise, and mortgage rates will continue to creep up.
So what does that mean for home buyers and sellers?
To answer that question, we take a closer look at some of the top indicators.
Housing Market Shows Signs of Stabilizing
After years of skyrocketing housing prices, much of Canada is now witnessing the effects of a governmental-induced slowdown. A combination of rising interest rates, stricter lending laws, and provincial policy changes was put in place to cool down an overheated market that had led to increased debt levels, decreased affordability, and historically-low inventory levels. These measures triggered a sales decline during the first part of the year. But the market seems to be stabilizing now—the Canadian Real Estate Association has reported positive sales increases for the past three consecutive months.
While it’s tempting to become skittish during a slowdown, it’s ultimately good news for both buyers and homeowners. Buyers will benefit from a more balanced market as inventory levels increase and speculators pull back. And homeowners who feared an impending “bubble burst” can rest easier knowing that the interventions put in place were explicitly designed to avoid such a scenario.
Did You Know?
Are You Renting? Rents Increase By Double Digits in 2018.
There are signs that an already hot rental market may be overheating now. A recent report shows rental prices rose by double digits in 13 out of 25 Canadian cities in the past year. This is good news for sellers since residents become more incentivized to purchase a home as renting becomes more expensive. It also signals a growing opportunity for investors interested in buying a rental property to see lucrative returns.
Interest Rates Expected to Rise
The Bank of Canada has signalled plans to fight inflation by gradually raising interest rates. After two rate increases so far this year, it declined to raise rates in September due to uncertainty surrounding NAFTA negotiations. Still, many economists expect to see another rate hike in late October.
What Does It All Mean For You?
If you’ve been waiting to buy a home, it may be time to strike. This is the most balanced market we’ve seen in years, which means greater choice and increased bargaining capacity for buyers. But you may need to act soon. Rising interest rates will decrease your purchasing power, especially in light of the new stress-test requirements. And as rental prices climb higher, you’ll be paying more each month for housing. Doesn’t it make sense to start putting those dollars towards building equity in your very own home?
If you’re in the market to sell, there’s good news for you, too. Demand for housing and a strong economy have kept prices high. But the new, more-stringent mortgage requirements have narrowed the pool of potential buyers who can afford to enter the market. Be sure to seek out a real estate agent who utilizes technologically-advanced marketing tactics to reach qualified buyers in your area.
Let’s Get Moving!
If you think you may be ready to buy or sell, give me a call. We have the skills and expertise to help you navigate this changing real estate landscape.
Call me today with your real estate questions… Cynthia Wollersheim # 262-787-2933 or email me at email@example.com