We've already seen an impact on buyers' purchasing power and financial position as a result of the recent Bank of Canada interest rate increases. Rates are rising and the cost of living is going through the roof.
Many home buyers may face higher qualifying rates and monthly payments this year as rates continue to rise until inflation is reduced. At The Condo Nerds, we understand real estate is still one of the biggest investments that the Canadian economy has to provide. Though it is a stressful time, there are still ample opportunities - and by that, we don't mean just good deals, we mean good strategies!
Here are some of our strategies for buyers in this market.
Finding a home you love vs. getting into the market
Right now there are deals to be had in the market! This past season, there were bidding wars everywhere and some people were settling just to get into the market. Now, because affordability has gone down, there aren't many buyers in the market and investors are watching from the sidelines. This has given buyers a good opportunity to go out into the market, look at multiple homes, think about which fits their needs and not have to worry about the infamous "offer date"
Look At Smaller Markets Outside The Core
In key markets like the GTA and Vancouver, it’s challenging to find a home under the $1 million (which requires a 20% down payment, by the way). So you might want to look outside of the core to smaller markets where there are opportunities to find homes under the million-dollar threshold in which you can try and qualify at a minimum of 5% down payment (depending on the price and your financial situation of course).
Consider a High Walk Score
Gas is through the roof and that means the carrying cost of a car is significantly increased! Not to mention, cars consume more as they age, so with every liter of gas you use, you're going to need more the next time, and the next, and the... you get what we mean. Condos are typically situated in an area that is convenient for residents to walk to plazas and stores. We tell clients to definitely consider this, even if they have a car. If you get into a condo where you find it easy to walk from point a to b - why not save money on a diminishing good and pay towards a growing one?
Consider A Starter Condo Apartment vs. Townhome
You don't have to always go big if it's your first, start slow and start small. There is a lot of opportunity in the 1 bedroom condo realm for folks to get their feet wet. These condos are starting in the late 500's, and there are even some that are below $500k, meaning you can get away with a 5% deposit...insane!
Let’s get you home