The benefits and fundamentals of home ownership remain strong. Here are 9 reasons to buy now:
- The overall average price in the Region has continued to increase. As of August 31, 2010 the 12-month average is up 6.89%. As well, the average sale price in each city in Niagara is remains positive.
- Mortgage rates remain extremely cheap because Lenders continue to compete aggressively for business. As of September 23, the Centum Financial Group has posted a fixed, 5-year mortgage rate of 3.59% on approved credit; in spite of the Bank of Canada boosting their policy interest rate.
- Regardless of market conditions, motivated sellers compete with other homes for sale and price their homes to attract buyers because they want it sold.
- Tax Advantages
a. You may be eligible for the First-time homebuyer’s tax credit that offers up to $750 in tax savings to help with closing costs.
b. With the Home Buyers' Program you can withdraw up to $25,000 out of your RRSPs ($50,000 for eligible couples) to buy a first home without tax consequences.
- You do not pay HST in Ontario on the purchase price of a resale home.
- Owning a home offers inflation protection as appreciation over time generally outpaces inflation. Real estate has remained relatively stable in Canada. A good rule of thumb is to buy a home you plan to live in for at least 5 years.
- Consider owning as forced savings, as part of your mortgage payment goes toward building your equity in the home. For example, take a purchase price of $210,500, 5% down and a 5-year fixed rate at 3.59% amortized over 25 years. The principal amount of the mortgage after 5 years would be paid down by about $22,982.
- Because it’s yours, you can decorate any way you like and no landlord will force you to leave.
- Above all, it’s the one investment that gives you the benefit of enjoying living in it.
Sources: Wall Street Journal, Brett Arends (9/16/10); MACLEAN’S Magazine (9/13/10), page 54, “Avoiding the Crash”.