It might not look or feel like it, but spring is officially here. And while the cold weather is expected to continue to grip large parts of the country well into April, the spring real estate housing season is already heating up, according to the experts at Canadalend.com.
Despite numerous reports that the housing market is overbuilt and overvalued, the Conference Board maintains that the Canadian housing market is neither. In fact, the Conference Board argues that housing starts over the last three years are in line with the 20-year average.
Even in Toronto, there is only a borderline case that it could be overbuilt. As a result, the Conference Board believes that only some Canadian market segments are due for a modest correction at best.
Overall, if there is some sort of price action, chances are good that it will result in a soft landing, not a hard one. A soft landing means housing prices across the country will rise, but not as quickly as they have historically; a hard landing, on the other hand, would mean the bursting of a housing bubble and a major correction in housing prices.
One major reason why the Canadian housing market will not experience a hard landing is because of a lack of supply; while there is increased demand, there is little supply. For example, the average selling price on Toronto’s multiple listing service (MLS) in February was $553,193, an 8.6% year-over-year increase, while house sales were up just 2.1%.
It’s even tougher in Vancouver. According to the Real Estate Board of Greater Vancouver, 2,530 homes were sold in February, a 40.8% increase from a year ago. At the same time, the Greater Vancouver Area experienced a 9.3% year-over-year decline in the number of homes listed for sale.
It’s not just potential home buyers in Toronto and Vancouver that are facing higher prices and fewer choices; it’s coast-to-coast. For home owners, it’s the perfect combination for getting multiple offers: low interest rates, low supply, and increased demand.
And for home buyers, it means a bidding war. And many are prepared for the battle: one in three Canadians are willing to get into a bidding war and a third of first-time home buyers will spend more than they expect to for the right home.
It’s tough to now get too emotional when it comes to buying a home. Many people have already purchased the welcome mat and mentally moved in before even signing on the dotted line.
The experts at Canadalend.com understand that buying a house can be exhilarating, but it can also be stressful. Even under the most ideal conditions, it can be difficult to navigate the often-confusing process of applying for a mortgage and buying a house.
If you’re looking to move into your dream home this year, contact an independent, licensed Canadalend.com agent. A Canadalend.com agent can get you pre-approved in 24 hours or less and help you find the mortgage best suited to your needs.
Is it better to get a fixed or variable mortgage? And what lender is best for you? After all, there’s a big difference between getting a mortgage rate of six percent and three percent. Whether you’re buying an existing home or looking at purchasing a new build, a Canadalend.com agent can help you save time and money and reduce risk.
Perkins, T., “Canadian home sales defy expectations,” The Globe and Mail, March 5, 2014; http://www.theglobeandmail.com/report-on-business/economy/housing/toronto-home-prices-jump-nearly-9-per-cent/article17311961
“Vancouver and Calgary home sales still climbing with prices up,” Financial Post, March 4, 2014; http://business.financialpost.com/2014/03/04/vancouver-calgary-home-sales-prices-february