The decision on whether to buy or sell a home this Fall has become mired by more than the typical uncertainties that come with a transaction of this magnitude. Housing affordability, interest rates and the mortgage stress test were big newsmakers in 2018 and 2019, and are continuing to make headlines during this Fall's federal election campaign with lots of housing issues and policies being up for debate.
So, what can consumers expect from fall real estate? Those seeking a long-range forecast will have to wait at least until election day and likely well beyond, once we see what party takes power, which policies they move ahead with and how these changes play out in real time. Uncertainties aside, here’s what we do know:
Canadian homebuyers seem to be getting used to the new mortgage rules, and there have been some important changes at the federal level that are expected to impact homebuyers and in turn, home sellers:
- The mortgage stress test qualification bar was recently lowered from 5.34 to 5.19 per cent, increasing purchasing power – albeit only slightly.
- The First Time Home Buyer Incentive (FTHBI) took effect on September 2, whereby eligible first-timers can get a shared-equity government loan to help with the down payment.
- The Home Buyers’ Plan (HBP) withdrawal limit was increased from $25,000 to $35,000, toward the purchase of a first home.
- Rumours of interest rate drops are circulating. The Bank of Canada’s interest rate announcements are a trending topic worth watching every six weeks.
Beyond these factors, fall real estate does experience some seasonal effects. For home sellers, the yet-favourable weather draws crowds to open houses, and many homebuyers experience FOMO (fear of missing out) at the prospect that their days are numbered before the typical winter lull in listings. This often results in increased activity.
However, this habitual seasonality is at the mercy of market conditions, which will have a greater effect on the upcoming fall real estate market than solely the time of year. Is it a buyer’s market or a seller’s market? Demand will be the biggest factor in the buyer’s and seller’s bottom line.
Homebuyers and sellers need to remember that all housing markets are local, and it’s more important than ever to tap into the ground-level expertise of a professional real estate agent, who can best advise you on market trends, and counsel you on the timing of the transaction, and the price.
Buying or selling a home is probably the biggest transaction you’ll make in your lifetime. Don’t leave anything to chance. RE/MAX is the most widely recognized real estate brand in the world, and for more than 20 years it has been the leading real estate organization in Canada. By receiving the best training, administrative and marketing support for the RE/MAX network, brokers and agents can focus on what matters most: real estate.
SOURCE: https://blog.remax.ca/what-you-should-know-about-the-fall-real-estate-market/ (Updated to reflect timing of this post)
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John & Cathy
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