The recent real estate market boom has come to an end, with many commentators pointing to over-heated demand as one of the main causes. While there is no denying that some areas have seen very strong sales activity, this does not represent the state of the market as a whole.
In fact, according to several statistics sources, we are currently experiencing the weakest level of home buying activity since 2001!
While it may be easy to assume that everyone wants or needs a house at present, what if I told you that only 10% of Canadians own their own homes?
This statistic was just released by Royal LePage, along with another interesting one: Only 52% of Canadian parents say they will likely buy a house in the next two years.
Given all of these numbers, how can we possibly expect to find a house for sale anywhere soon?
Fortunately, we do have some clues about when a hot housing market turns into a cooling off period. It happens every few decades, so let’s take a look at some examples from our past!
Disclaimer: This article shall not take any responsibility of lost business due to changing market conditions nor shall it take credit for upswings in the market. We write purely for educational purposes.
There are a lot of hot markets
The market today is not like what it was even five years ago, when we first spoke about how crazy the real estate market was becoming here in Canada’s largest province. Back then, there were only really two or three areas where people could make large profits, so most people struggled to afford a home.
Now, almost every region has something that’t have enough homes available for sale, and those homes go way up in price quickly. This means if you don’t own a house already, you can probably expect to pay a pretty high price for one soon!
There are also many overheated markets, where too much demand has led to inflated prices. And while this may be fun to watch as a buyer, it can prove very expensive later on, especially now that interest rates are back at normal levels.
We will talk more about which regions these are next week.
There are also a lot of markets that are not as hot
The other major market segment is actually what we refer to as “non-hot” or “lack luster” real estate. This includes properties that may be slightly older, possibly with less glamorous features, but which you can still put your own personal stamp on and make it yours.
There are many ways to approach this type of property. You could pick up and move into it quickly (or maybe not so quickly!), invest in some renovations, or even create your own by buying an empty home and renovating it yourself!
More likely than not though, people will start moving into these homes and making them their own. It’s very possible for someone who has just moved into the area to realize how beautiful and valuable their house is.
The market is not as hot as it was
Even though we are now past the peak of our real estate boom, you must remain calm about the state of the market. We still have an oversupply of homes, there are limited numbers of houses for sale, and even lower demand due to weaker economic conditions.
It is very important to understand that although the market has cooled down, this does not mean that the market is back! It will take some time before the supply meets demand again and house prices rise once more.
Just because the market has slowed down doesn’t mean that people should get rid of their home or stop investing in theirs. Investing in your own home is a great way to increase your net worth and wealth.
There are many ways to invest in your home such as renovating it, buying a nearby property with land, or moving into another area to find a new place to live. All of these things can be done without having to borrow large sums of money.
Renovations are one of the best ways to improve the value of your home. By adding features like double glazed windows, vinyl floorings, oak cabinets, and solar panels, you are increasing its attractiveness and potential resale value.
There are a lot of new developments
Recent news surrounding the real estate market has been mostly positive, with many cities experiencing an increase in home sales. This is great to see as most municipalities have seen a decline in house sales over the past few years!
Ontario’s population continues to grow which is why it makes sense that we would also see an increase in housing demand. More people means more money for homes!
Many experts agree that this growth will not happen overnight but it can be expected to continue for at least the next couple of years.
There are several factors responsible for the recent rise in home sales including availability of mortgage credit, improved affordability due to lower interest rates and strong employment levels.
While these conditions are still needed for a sustained rebound in the province’s overall economy, they do represent progress towards recovery.
There are also a lot of old developments that are not up to code
Recent news surrounding the real estate market in Canada is mostly focused on how much it has fallen, but there is another important factor to consider – what kind of market we have.
If you visit any major city outside of winter, you will find people going about their business with a relaxed smile on their face. People seem to enjoy living here and are willing to pay top dollar for homes or condos they want to call theirs.
This article will talk more about the differences between the two markets and why this matter when it comes to choosing where to invest your money.
The term ‘luxury housing’ was coined many years ago to describe expensive houses close to good schools and amenities. Since then, the term has been overused, but it still applies today.
There are several types of luxury homes, from large mansions to small bungalows, but all are characterized by being larger than average and having excellent quality interior and exterior features. They may also be closer to good services and facilities.
Ontario used to fit into this category, but now some of the most luxurious properties can cost well over a million dollars!
Many believe that the recent drop in values is due to investors taking advantage of lower priced property. This argument misses the point that not every part of our society benefits from an investment culture. Some feel that investing makes them look like millionaires even though they cannot afford to live in these new homes.
There are many factors that affect the market
The real estate market is not just made up of home buyers looking to purchase a house and sellers trying to get as much money for their property as possible.
There are also agents who make a good living off of selling overpriced homes or ones with more advanced marketing strategies. And there are people who have invested heavily into the housing market, building houses or investing in renovations. All these different groups contribute to the healthy growth of the market.
But what if we took away one of those key ingredients? What if everyone gave up and you could find out how they survive without it? That would definitely bring down the market!
We all know at this stage of the economic downturn that things can quickly go south. A lot of industries depend on the sale of goods to keep themselves afloat, and the real estate industry isn’t any exception.
There are many factors that affect the market
While it is always great to search for a home, you should know what the current state of the real estate market is before buying or selling anything.
This article will discuss some important things about the Canadian housing market and how it is affecting the Toronto area.
It’s very difficult to get an accurate picture of the health of the local real estate market without looking at all of the different components. In fact, there are several types of reports that can be used to determine if the market is healthy, depressed, or recovering.
Many realtors have access to these reports so they can tell whether or not the market has improved over the past few months.
Reports such as the ones mentioned below will give you a clear idea of everything that makes up the Canadian housing market. They’ll also help identify where the most attractive markets are.
Some tips for buying or selling real estate
Being motivated to buy or sell a home is key to success. If you are not, you will likely give up before you start trying really hard.
It can be difficult to motivate yourself when you don’t feel like you have enough money to purchase a house, or you don’t know anyone who owns a house already, but that doesn’t mean you shouldn’t try to become a homeowner.
Thinking of all the things that need to happen (like paying taxes and utilities) can make it seem impossible to own a place, especially if you don’t have much money saved up.
But by being aware of some easy ways to increase your savings, you can more easily add onto your nest egg. And once you do, you’ll have more options when it comes time to buy a house.