Opinion is split on where prices are headed in hot housing markets like the greater Toronto and Vancouver areas, and for the country at large, which saw a booming summer real estate market carry its momentum into fall.
Paul Taylor, CEO of Mortgage Professionals Canada, sees the potential for prices to dip in 2021. Government support programs are offsetting the economic damage significantly at the moment. Should they be reduced or withdrawn, there’s potential for a larger portion of mortgage holders to default, or be forced to sell. It’s the unknown elements in these projections that spur the Canada Mortgage and Housing Corporation(CMHC) to predict 9 to 18% overall property value declines, while Royal LePage suggest something closer to a 7% decline. Most are sure, there will at least be price stagnation for a while beginning next year.
Canadian real estate prices will go up
The senior economist with the Canadian Real Estate Association doesn’t see price stagnation or decline on the horizon. He expects prices to continue their upward trend. According to him, this was expected, even before COVID-19. He explains: On the surface a lot of things are different, but we are still seeing a lot of people looking to buy and not a lot of supply. There’s a lot of competition for listings, where you are getting multiple offers and those prices are being bid up. Things aren’t necessarily the same as it would have been without COVID, but overall, price growth was expected because there’s just not enough listings for the number of people looking to buy.
Bottom Line: Even the pros aren’t sure yet where the market is heading, so just stay focused on your own homeownership goals and don’t be swayed into panic buying or selling. Talk to a Realtor to learn more about market conditions in your area and for the type of home you are interested in.
Mortgage Rates will stay low
You may have heard rumblings of interest rate hikes in the future, but these forecasts are long-range, so don’t let them worry you. The Bank of Canada has signalled that interest rates will be low well into 2022 and possibly even 2023. As such, mortgage interest rates will also stay low – although perhaps not at today’s record-breaking lows.
If you’re due for a mortgage renewal or you’re interested in refinancing in 2021, go for it. But if your mortgage matures in 2022 and prepayment penalties have you concerned, don’t worry about it – you’ve got plenty of time to renew. Contact one of our brokers and we will be able to do a Mortgage Analysis for you to establish if it is worth breaking your mortgage early.
If you are getting ready to buy a home in 2021, speak to our mortgage brokers before arranging any home financings. The banks, credit unions and other lenders will each respond differently to the pandemic’s economic fallout, so speaking to an expert who understands multiple lenders’ thoughts will be more important than ever.
Original article: www.mortgagebrokernews.ca