13 Nov First time home buyer? Considering an income property? Now is your time.
If you’ve been waiting for the “right time” to buy a property, either for yourself or as an investment, the market conditions are very favourable for value conscious Buyers to get into the market.
Here’s a quick 2017 recap for context:
Up until April, Sellers had the upper hand in completing transactions as housing inventory levels were at record lows and Buyers faced stiff competition to secure properties (this was known as a “Sellers Market”). Since May, housing inventory levels have increased dramatically in the GTA. While Mortgage qualification rule changes and interest rate increases that have taken back some buying power from purchasers, the dramatic increase in available properties for sale has tipped the market conditions from a “Sellers Market” into a “Buyers Market”.
So what does this mean?
First Time Home Buyers have a better selection of properties, at more competitive prices, and can generally negotiate more favourable terms in the present market to best meet their needs.
While some Buyers have taken a herd mentality and are sitting on the sidelines, savvy shoppers are buying now and finding excellent value for the first time in several years.
Still not convinced? Here are three reasons why you should consider making a purchase now:
With housing inventory levels up the negotiation power now belongs to the buyer. For the first half of 2017, the housing market was so hot properties were selling before they even hit the MLS. Now, the average time a property sits on the market is 20 days. The Sellers who are on the market are motivated – they want to get their deals done, and are now prepared to be more aggressive in courting Buyers with more favourable terms and prices.
Rents are up, way up. If you need to move, rents are 20% higher than they were a year ago. Vacancy rates remain at record lows with less than 1.5% of the available housing units being available for lease. If you have to move, your cost of living will increase dramatically, with no return to you such as building principle and equity in a property. Even with the recent Mortgage interest rate increases, borrowing costs remain at historic lows. The cost to rent vs. own is essentially flat – if you’re renting you’re already paying a mortgage, just not your own. For investors, increased rental revenues are a strong incentive to acquire properties at discounted prices in the current buying environment.
New rule changes in the Mortgage Market will come into effect in January 2018. Current lending guidelines are still in place, but qualifying will be more difficult in the New Year. Borrowers will face a new stress test/qualifying process that requires Buyers to qualify for 2% above the posted lending rate. The stress test could mean you will qualify for less money to purchase your home in 2018. The good news is, in the current market you will be able to negotiate with the seller making your dollars stretch further, and new qualifying guidelines do not take effect until the New Year.
Whether you are qualifying for your first mortgage, or require financing to buy an income property, the process to obtain your financing can at times seem daunting and overwhelming. At Shirriff Wells we have the experience and a professional team of mortgage experts to guide you every step.
There has not been a better time to get into the GTA market in recent history, so if you are considering a property for yourself, or as an investment – now is the time to act! Shirriff Wells is here, with a team of professionals, to help with anything you might need along the way. Contact us today to begin your journey to home ownership.