The average overall price of houses compared to last year in February is still 18.2% higher. According to the MLS stats the national average of sales dropped 1.8%. The drop is mostly due to Vancouver. Toronto's boom has helping in not dropping the average too low. I believe that we have such booming markets across Canada that it has to come down at some point. Many real estate analysts are predicting an increase in sales before the HST is implemented, and interest rates are due to increase.
I still believe we will see a drop in sales and the market will have plenty of inventory toward the end of the third quarter. Many people will want to sell their homes in this hot Toronto market and get out of their higher mortgages of the past to secure a lower percent before the rates go up.
It only makes sense. Buy a new house and get into it for lower Mortgage rates.. Cheaper rates now mean more money later. Another factor now plaguing buyers are the new mortgage rules that are set to be imposed April 19.
"New qualifying standards will mean borrowers must be able to handle a five-year, fixed-rate mortgage, even though they may opt for a shorter term and lower rate. The government said this test will help homebuyers prepare for higher rates. As it now stands at the major banks, borrowers are income-tested for a three-year fixed rate. Craig Alexander, Toronto-Dominion Bank's deputy chief economist, said in a research note that the change could influence about 25 per cent of all new mortgages. That does not mean those buyers wouldn't still buy, but they may have to lower their expectations as to the size of the homes they want, Mr. Alexander said. Based on a 5-per-cent down payment and a national average home price of $337,000, a buyer would need about $9,200 more in annual income to qualify under the changes, Mr. Alexander said. At $200,000 and 5 per cent down, that would fall to $5,500."
The new mortgage rules will surely change the way we obtain our mortgages in the future. Some analysts say it will secure the markets in the future and avoid a future pitfall in our economy. Personally I don't believe that is totally possible because we are such a global economy now. We can prevent a total destruction of our economy to some degree, but overall we would still see a decline if the world has a recession like it happened two years ago.
I have stated before this is the time to buy a property. The money is cheaper than it is going to be and the restrictions are not as tight as they will be in a month. So what are you waiting for. Call me to help you look for a house and sell your current one. erniearrizza.com