It was a pleasure and a honour to be invited by OMNI Television to do an interview for their programming ‘Focus Portuguese’ to discuss important topics relating to the current Real Estate Market.
Here is the translation.
1. Home sales are down and borrowing costs are up. Is now a good time to buy property?
It’s important to understand what they are down from. Are they down from a normal balanced market, or down from what was a an overheated market. Sales are down, but the price of a home is still higher that what is what last year 5.3%.
If you’re a first time homebuyer, there is opportunity to get into the market now. The market is seeing some balancing with less competition. If I was a buyer, I would be more concerned with rising interest rates than I would wondering if prices will continue to decrease and by how much.
2. Is now a good time to sell?
Whether or not it’s a good time to sell really depends on the seller’s situation. When I meet sellers for the first time, I ask a lot of questions to determine their needs, motivation, their short/long term goals so I can understand where they are at. I will listen to what they tell me and then guide and educate them on what’s happening in the market. That will really allow them to tell me if it’s the right time for them, and make that decision. They are the ultimate decision makers. There are many serious buyers out there looking to purchase, there’s no question about that.
3. Inflation was also at 7.7%. Is there the fear factor of those looking to buy a home?
Yes, consumers are concerned, inflation affects mortgage rates as we are currently seeing. This affects buyer affordability, there’s now less buyers or buyers now looking for homes in lower price points turning to condos/townhomes. Those buyers are now creating demand in the lower priced homes for sale and the leasing market. Regardless of these factors, demand for housing will continue because of the continued low supply. Canadians are very resilient and adjust well. They look at the total monthly cost to carry home and if they have to adjust and pivot to lower priced homes to acquire ownership than that’s what they will do.
4. BOC is expected to raise interest rates to 3.25% in October. Inflation is anticipated to continue rising. Is the future uncertain for those looking to acquire property?
No one can predict the future. Acquiring property is still and always will be the safest form of investing. Even with sales dropping from this time last year, prices continue to increase at a healthier pace. The longer a buyer waits, the further out of reach acquiring property will be.
5. Economists are predicting a reduction in housing prices 20%, when will we be able to see these numbers?
Nobody has that crystal ball. What we are seeing now is a correction in the real estate market. The only thing we can say with certainty is that another interest rate increase is coming. So for buyers waiting on the sidelines for those prices to drop, they will actually be paying more in borrowing costs down the road.
6. In order for a family to purchase a home in Toronto they must have a down payment of 20%. Is this the Canadian dream?
In most cases you do need 20% down however if the purchase price is under 1 million you can buy with only 5% down. There are many factors to consider, but yes, I’d say it’s the Canadian dream.
7. New construction has also slowed down, but with Canada welcoming 400,000 immigrants every year could it have an impact on the real estate market?
New construction has slowed down due to higher construction costs and lack of available land to build. Construction materials have gone up significantly which is therefore transferred on to the consumer in prices. This has slowed sales in new communities. That too will adjust in time. We have been in a housing crisis for some time, there are still far more buyers looking to purchase than homes available for sale. As immigration continues so will the demand for housing. As long as there is demand the real estate market will remain healthy.