Oshawa Realtor

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Greater Toronto Area real estate markets hit hardest by interest rate hikes

Posted by Steven Greenidge on Dec 03, 2023

In a recent article ByGraeme Frisque Mississauga News we see the breakdown of the local markets and how ...

The man alleged to be behind a high-interest mortgage scam, is living large on social media

Posted by Steven Greenidge on Nov 28, 2023

This man, alleged to be behind a high-interest mortgage scam, is living large on social media Anas Ayyoub, ...

Decoding the Deal

Posted by Steven Greenidge on Nov 28, 2023

Decoding the deal Assess Financial Components The financial components of the offer are the first thing ...

Buying a Pre-Construction Condo

Posted by Steven Greenidge on Nov 12, 2023

Toronto Pre-Con Info

October Stats from the Toronto Region Real Estate Board

Posted by Steven Greenidge on Nov 05, 2023

Hi , The Toronto Region Real Estate Board has released the latest numbers for October. I have created ...

Fall Rental Report from TRREB

Posted by Steven Greenidge on Oct 26, 2023

TRREB: Strong Population Growth Driving Rental Demand in Q3 2023 TORONTO, ONTARIO, October 26, 2023 – ...


BOC Heading to 5%

The Bank of Canada will raise borrowing costs by another 25 basis points in coming months before capping its tightening cycle, economists said. 

Canada’s central bank will increase its key overnight rate to 5 per cent in the third quarter, according to a monthly Bloomberg survey of 25 economists. That would be the highest level since 2001.

The outlook still more or less shows the economy headed for a so-called soft landing as policymakers push rates deeply into restrictive territory. Analysts raised their expectations for growth in 2023 to 1.3 per cent from 1 per cent previously, and trimmed forecasts for next year to 0.7 per cent. Inflation is expected to run at a 3 per cent annual pace to end the year, from a 2.7 per cent clip expected in the previous survey. 

The results underline the challenge faced by economists as they try to pinpoint the end of Governor Tiff Macklem’s hiking campaign. In the last year, expectations for the country’s terminal rate have been consistently revised upward as surprising economic growth and robust household consumption defy the widely held belief Canada is more sensitive to higher interest rates than its peers. 

Central bankers around the world are facing similar challenges as inflationary pressures prove stickier, even in the face of aggressive tightening. In the US, economists expect the Federal Reserve will cap out at 5.5 per cent and investors are betting the Bank of England will go as high as 6.25 per cent.




What is the cost of waiting?

The big quesitons is What is the cost of Waiting?

How much are you paying your landlord for rent when you could be paying down a mortgage?  

But the rates are too high?  As we have seen in many cases rates can have a subtle affect on price.   Unfortunately supply and demand seem to have more influence.  So does it pay to wait till rates come down?

More recently we have seen prices go up while rates have risen however remember we saw a marked decline last year from a peak high during the rate increases.  The question remains will a further increase affect pricing.  What it may do is force more properties to the market to avoid distress.  

There will be a point in many peoples' situations where a sale will be preferable to default.  One step back to move forward as it were. 

In theory with the increase of availability we should see plateau or decline in pricing if and only if supply exceeds demand.   This is the tipping point.  So far even with increased rates we have not seen this trend develop to any great extent.  What we have seen this spring is a relitively normal spring bump in the market pricing.  In a normal year we would see a plateau and slight fall back in pricing as the decline in demand of summer progresses.  We normally see another bump in demand in the Fall market.     

So....  How do we time the market?  Well any money manager will tell you that it's "Time in the market not Timing the market"  Yet so many try despirately to time the real estate market.  

I think the smarter strategy is to have financing in place and actively search for the property you would like to live in.  I always say the hardest part of finding the perfect home is to find the perfect home.  There are many peoperties that are within your financial capabilities the only question is findng that one that ticks all the boxes. 

Reality Check Time...

The other reality in your home search is realizing that if you are not seeing a home that matches your relative needs ie. size and location within your budget then you must revise your criteria.  ie.  4 bedroom home in the City of Toronto valued at 800k....  it probably doesn't exist and won't ever.  The market has surpassed that valuation.  

So the Question Remains...  When is the best time to buy a home?  When you need a home and want to stop paying your landlord's mortgage.

Things You Can Do To Prepare for Home Ownership

  1. Get your Financing process started with an Application & Rate Hold & Budget.
  2. Connect with Me for your Search
  3. Actively Look for suitable properties 
  4. Follow The 20/30/3 rule.

The 20/30/3 rule tells you the home you can afford.

  1. 20% down
  2. Household expenses < 30% gross household income 
  3. Price < 3x gross household income 

We can ignore the math but I can guarantee that we will not be able to ignore the consequences.

Durham Region Real Estate