Since March 2020 we have been seeing a series of not just unfortunate, but also unpredictable events. More than a year into this Pandemic, a lot of my clients have expressed concerns in investing in property, so here are some facts that may help you make that decision and have a clear answer to the above question. Depending on your situation, this may or may not present to you some opportunities to seize. Let’s find out.
First, you need to figure out what your needs are. It isn’t a surprise if these needs have now changed due to the pandemic, and the place where you live now may no longer meet your needs or present to you problems you hadn’t foreseen. Buying a property is not just a financial decision, but it can also be a life changing one.
Jonathan Haziza, Senior Manager, Retail Financing Solutions at National Bank, rightly said, “That’s why it’s important to evaluate your personal financial situation and to seek advice from professionals who will be able to guide you through these hectic times. They could help you find the right financing solution as well as answer your questions about a rapidly changing economic environment.”
Secondly, do you know how the real estate market is like in your area? So you may have seen something in the media, or heard something from a friend, about the market in a certain area. However, that may not be the case in your area, or there may be other influencing factors. Have you spoken to a qualified agent?
There are some important factors to consider if you are evaluating the market in your preferred area to name a few:
- What was the strength of the market before COVID-19?
- How many jobs have been lost?
- How much is the strength of the economic recovery?
Now let’s focus on the big questions. Has the real estate market recovered? Have the mortgage rates gone down?
According to the Canadian Real Estate Association (CREA), property sales in Canada increased 7.2% from November to December 2020. For a fifth straight month, national sales remained at an all-time high, going up by more than 55,000 homes.
It’s safe to say that the Canadian real estate market is booming, despite the COVID-19 pandemic. Canada had a record year of property sales in 2020, with a 12.6% increase in transactions compared to 2019.
The Bank of Canada has lowered its key interest rate three times to make it go from 1.75% to 0.25%, since the start of this Pandemic. Therefore, mortgage interest rates have been seen to reach a historical low. According to Statistics Canada, as of November 1, 2020, the average interest rate offered by Canadian banks for a 5-year fixed mortgage was 2.01%, which is a decrease of 0.7% since April 2020. I know, I could barely believe it too!
Although it’s hard to predict how they’ll change in the future, if you ask me, if you, if buying a home is your priority and you are financially prepared for it, don’t hesitate to seize an opportunity if you see one.
(National Bank, 2021)