23 March

How to Prepare for the Upcoming Housing Market Recovery

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If you are like many out there who have been sidelined from buying a new home due to current market conditions, the wait may soon be over. Canada’s economy is signaling good news for both buyers and sellers heading into the peak spring 2024 buying season, with many experts predicting an imminent housing recovery on the horizon.

Several market indicators support an upcoming market recovery. According to the Canadian Real Estate Association (CREA), home sales activity has ticked upward, kicking the year off strong.1 In fact, home sales in Toronto for January and February increased by double-digits.2,4

Combined with anticipated interest rate drops as a possibility, now is a great time to buy. But to have the best chance at successfully landing your dream home, it’s important to have the right purchase plan in place that capitalizes on both current and upcoming market trends. Here are three things you should do to prepare for the upcoming housing market recovery.

 

1.    Do Your Research

 

More often than not, buyers with who have more information and perform pre-buying research are more successful with their purchase transaction. That’s because knowing what you want, how much you can afford, and where you want to live can give you an upper hand over other market competitors who jump into buying without adequate preparation.

Other things you should research are mortgage programs that fit within your budget as well as any available programs that can help you become a homeowner for less.

Specifically, many new buyers fail to consider key government programs that can make buying a new home easier. For example, the Home Buyers’ Plan (HBP) program can add flexibility when financing a new home purchsae.3

 

2.    Start Your Property Search Early

 

Once you have crunched the numbers, it’s important to work with your realtor and begin your property search early. Notably, the number of listings in the Great Toronto Area increased in February, giving buyers more purchase options. However, many industry experts have also noted an uptick in viewing requests.

As more buyers are trying to engage sellers before the seasonal uptick in spring occurs (and before competition spikes when interest rates drop), being the first to dip your toes into the market could give you a leg up and land you a sweet deal before demand and subsequent prices shoot up.

 

3.    Consider Preconstruction Homes

 

If you are having trouble finding the right home for your budget, don’t rule out preconstruction homes. Over the last few years, inventory has been relatively tight and while it is improving, it can still be hard to find the right home for your budget.

Yet, in terms of inventory, there are a lot newer condos available across the Great Toronto Area than ever before. Choosing to buy a preconstructed condo can help you get into a home now and often comes with a lot of added amenities you wouldn’t get owning other property types.

Similarly, builders often offer extended payment programs that often work better for some budgets. Builder incentives including mortgage top-ups and lower deposit until occupancy options can make preconstruction condos excellent buying opportunities.

 

Summary

 

Early signs point to an upcoming housing market recovery heading into peak spring homebuying season. Buyers should start preparing now to increase the odds of successfully purchasing a new home.

Inventory trends are improving across the country, but especially in the Great Toronto Area. Demand seems to be trailing slightly but is anticipated to jump as experts anticipate future interest rates cuts. But once demand increases, so could home prices.

Buyers that can afford a home now should plan to do so to capitalize on current prices and market trends. Completing pre-purchase research, jumpstarting your property search, and not ruling out preconstruction inventory can give buyers a leg up on the competition.

 

Sources

 

1 https://coveringscanada.ca/signs-of-recovery-in-canadas-housing-market/

2 https://www.reuters.com/world/americas/toronto-home-sales-outpace-new-listings-january-market-tightens-2024-02-06/

3 https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/what-home-buyers-plan.html

4 https://financialpost.com/real-estate/toronto-home-prices-inch-up-buyers-adapt-mortgage-rates

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