Canadian Housing Bubble May Return: Experts Predict
“The housing bubble could shift into high gear” by Robert McLister, recently published in The Globe and Mail.
The Canadian real estate market experienced a significant drop in prices last year, but there are now indications that it could be on the rebound. The Canadian Real Estate Association is set to release its April resale data, and many are predicting a surge in home sales and prices. This has the potential to create urgency among prospective buyers, who may be worried about missing out on the opportunity to purchase a home before prices rise further.
Opportunities and Risks for Buyers in the Current Canadian Real Estate Market
However, there are also risks associated with entering the market at this time. For example, rising prices could lead to higher mortgage payments, higher down payments, and higher lifetime interest costs. Furthermore, if the market experiences a short-term price spike driven by fear of missing out (FOMO), buyers may end up overpaying for their homes.
Despite these risks, the current market conditions present an opportunity for well-qualified and risk-tolerant buyers to enter the market. Record household formation, deficient housing supply, income growth, improving sentiment, and the prospect of falling rates are all factors that could contribute to a bullish market in the short to medium term. However, rising unemployment and stricter mortgage rules may dilute some of this demand.
Determine your budget
Get pre-approved for a mortgage
Research the housing market
Work with a real estate agent and plan the closing cost
Inspect the property and consider the location
The impact of potential rate cuts on the Canadian real estate market
The article also discusses the potential impact of future rate cuts on the market. While the current fixed rates are near multiweek lows, it is unclear how long they will remain there. Markets are expecting the Bank of Canada’s next move to be a rate cut, but it is uncertain when this will happen.
