Buying a house will always be a major decision one makes in their lifetime. Even more so now during this pandemic, when there are a lot of uncertainties ahead of us. For a few months at the start of the pandemic last year, it is undeniable that the effects of the pandemic on the economy as well as the restriction on movements affected the real estate market negatively. However, since May last year, there has been a steady recovery in the market with home prices eventually topping $1M in January this year.
You might have wondered, is it a good time to buy a house this year? What factors should I consider in the 2021 Housing market? Let's go over some of these factors.
First, Home prices continue to rise
Despite the high unemployment rate and uncertainties, the demand for homes remained high. In our previous house market reports, it was mentioned how there was an increasing demand for bigger spaces found in detached homes. Few reasons are that most people now spend long hours at home as employees have the option to work remotely and students shifted to online classes. The increased demand thus resulted to increased home prices.
Another thing is that the Bank of Canada jump-started the economy by offering historic low-interest rates on mortgages. This also contributed to the intense interest in the market as first-time homebuyers now found it easier to enter into the market and purchase their first home. These young buyers weren't fazed at all by the limitations of virtual viewings.
Lastly, there are more sellers than buyers. There is still currently a short supply in the market as sellers are just starting to get confident in listing their properties.
Second, increasing interest in the suburbs than the urban core
As mentioned earlier, there has been increased activity in detached home sales. Interestingly though, many now no longer find it necessary to live in the downtown area as the pandemic took away movements and activities that made living in the city core appealing in the first place. Suburban homes typically have bigger spaces which make them ideal for work-at-home employees and the low-density area makes it easy to practice social distancing.
However, it's important to remember as well that sooner or later things will eventually fully return to normal. There will come a time when immigration will be at its peak again and these groups of people will be looking at condos or apartments within the city core. By the 3rd quarter in 2020, there had been a 10.5% increase in condo sales and an 8.3% increase in average price compared to the previous year. And it is expected to continue to rise in the next few months.
Third, determine the perfect time for you to purchase
"Make the move for when it makes sense for you. You won't be wrong over any period of time. Right now, the reason there is so much interest is that mortgage rates are so low, so it's not a bad time to purchase a home" Phil Soper said, the President and CEO of the Royal LePage.
True, Canadian house market will get more expensive as time goes by. But the most important determiner in purchasing your home is when you can afford it. Another practical tip is to look at purchasing a home in the long term. Once the pandemic is over, you might want to prefer city living over suburban or the other way around. Try to focus on where you see yourself living in the next few years, instead of limiting yourself to the current pandemic circumstances.
So, the Toronto real estate market remains robust despite the ongoing pandemic. There is a significant increase in home prices and it can be expected that it will continue to do so for the next few months as buyers outnumber sellers in the market. With all the all-time low interest rates, now might be the perfect time for first-time homebuyers to purchase entry-level housing.
If you have any questions or need help buying your home, I can help. You contact me at 647-834-9928 or send an email to firstname.lastname@example.org
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