While everyone anticipated a back to new normal in 2022, the housing market did not exactly cooperate. Interest rates increased, which was a great impact on the housing market. Properties still changed hands but at a slower rate. Mortgage rates increased along with the interest rates to a tune of about 3%, translating to over $150 increase in monthly mortgage charges for each $100,000 of borrowed money. Couple this with higher property taxes, utility costs, and appliance replacement costs, and you have a definite strain on the household budget.
At this point, it seems that the hikes are over, but it does not mean they will be reducing any time soon. Historically, they average about 5%, and that is where we expect to see them remain through this coming year. There are an increasing number of voters asking the Canadian Government to loosen some of the current regulations. This pressure will mean representatives will be taking a good look at the stress test and amortization period, at the very least. Since January 1st, 2023 foreign buyers are forbidden to buy properties in Canada for the next two years.
Rising Interest Rates
Considering the already high prices for real estate and the current interest rate, this will be a particularly interesting year. Experts will be looking at several factors, which you should be keeping an eye on as well. There are a number of projects in the Greater Toronto Area that are scheduled for completion this year. However, the buyers prequalified for the loans when interest rates were lower. Now that they have risen, it will be interesting to see if these properties will close as planned or if the change in interest rates will have an impact.
In this scenario, one option might be an assignment sale. That is when the original buyer allows someone else to take over their rights and obligations before the sale of the property actually closes. This is a reselling technique that can get the original buyer out of the hot box and allow another buyer to step in. This is an intriguing option for those potential owners to snap up good properties.
Get Help From the Experts
Despite all of this, life goes on with mortgages coming to maturity, plans to refinance your current home, transfers and relocations, all of which will require dealing with the impact of rate increases. Fortunately, we have companies like Easy House Loan that can help homeowners and potential buyers understand their best options. The representatives at easyhouseloan.ca have experience with buyers with various financial situations. Their expertise helps individuals and families realize their goals despite the intricacies of lenders and government restrictions.
At Easy House Loan, there are individuals assigned to keep track of all the trends in real estate in Etobicoke. They collect the data and maintain close watch to determine any shifts in the trends. They use this information as an advantage to help their clients, like you, to make the best decisions in their real estate transaction. So, even with high-interest rates and a somewhat fragile market, with Easyhouseloan.ca you can feel confident that you will get the best rates to complete your home purchase and achieve your goals.