Home buyers should jump into the market before interest rates go down, says expert. Housing market to heat up once Bank of Canada starts cutting rates.
Home buyers who are already pre-approved for a mortgage should enter the housing market now instead of waiting for interest rates to go down, according to one industry expert.
The spring housing market is expected to be “very hot” because of the pent-up demand for properties, said mortgage broker and Lowest Rates expert Leah Zlatkin.
Many buyers have been sitting on the sidelines, waiting to jump into the market as soon as the Bank of Canada cuts interest rates, which most economists expect will happen in June.
“There are many people who are ready and poised to buy right now,” Zlatkin said in a recent interview with the Financial Post’s Larysa Harapyn. “For those people who are pre-approved, I highly recommend getting into the market now as opposed to waiting.”
There isn’t much inventory on the market in Ontario at the moment, and homes that are for sale are in demand, she said. Bidding wars are breaking out on homes costing $1 million or more, in some cases.
“There are not enough homes in Ontario for everybody who lives here,” Zlatkin said. “And if you’re qualified right now, it is a good time to buy.”
Higher interest rates mean it is also harder to qualify for a mortgage, especially in the Greater Toronto Area, where the average home price runs to $1,065,800.
Zlatkin suggests home buyers consider compromises such as moving into a smaller property or moving further out of town to enter the market.
“You may need to make sacrifices … in order to get in now before it becomes more expensive and more difficult to get into,” she said.
High demand for housing is expected to continue over the next few years in Ontario because construction is not keeping up. Home builder sentiment hit a record low in the fourth quarter and housing starts are expected to slow in the coming year.
“For many people, a starter home isn’t always a town home, it isn’t always a detached home — it might start out being a condo,” she said. “We, as a society, need to decide whether or not we’re ready to make those concessions.”
Zlatkin says she is already seeing a lot of requests for pre-approvals, but cautioned buyers to stay within their budget.
“Know what your budget is and play within it,” she said. “You don’t want to spend more than you have.”
Source: Financial Post
