Is the real estate market peaking soon?

There’s been some discussion recently within my circle of friends on the topic of a real estate bubble. Some have predicted a strong correction in housing prices in the near future. Though I can’t say when and if there will be a crash in the real estate market, there have been some unfavourable signs. The Canadian loonie dropped below 86 cents U.S. (some expect more downward pressure), Oil drops below $56 U.S. a barrel, click here for today’s update on Oil and the Loonie. However, the unemployment rate, though up a bit in November, is still at a 5 year low. So what does all this mean? Is it enough to discourage you from buying? If you currently own a home, will you sell it now and move your entire family to a 3-bedroom rental apartment and wait for a crash and then buy again? That strategy would be more suitable for stock traders, timing the market. Am I saying buying a home is like buying stocks? NO. We don’t buy stocks for our family’s well-being. Owning stocks will not put a roof over our heads. Buying a home depends on many various factors and most of those, I would say, are related to lifestyle choices and needs as opposed to investment decisions. If you need a place to live, you can either rent or buy. If you rent and wish to buy when the market is low, you may have been one of the unlucky ones that saw house prices climb to new highs. If you are looking to buy for the long term and it’s a lifestyle choice you wish for your family, to have a place to call your own, then you need to work out numbers. Are you taking on too big of a mortgage? Don’t forget about other monthly costs besides your mortgage payments, and say in 5 years when it’s time to renew your mortgage and the interest rate is at 5 or 6% (a huge IF), would you be comfortable with your future payments? Bubble or no bubble, at these prices and low interest rates, you’re better off to have a game plan in place. If you have questions and want to find out more about what options are available, speak to a mortgage specialist or a realtor to understand what your options are. Feel free to call me anytime to chat, I’m here to help.

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Thomas Cung

Thomas Cung

Sales Representative
CENTURY 21 Atria Realty Inc., Brokerage*
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