There are many reasons why people might be hesitant right now to buy real estate in Ontario, but REALTOR® Marco Dias makes a strong case for jumping in.
He shared with Village Media his top 5 reasons:
1. Investment
Real estate is often seen as a stable investment, says Dias, with historical data suggesting appreciation over time. Buyers may purchase properties to generate rental income or to benefit from long-term capital gains.
2. Home ownership
Many people aspire to own their own homes for stability, security and the freedom to be able to personalize their living space. Home ownership also provides a sense of pride and accomplishment.
3. Location and lifestyle
People often buy real estate based on the location and the lifestyle it offers. “With my own young family, these factors were paramount,” says Dias. “Being situated in a mature neighborhood close to schools, having access to numerous parks, walking trails, convenient amenities such as shopping and recreation centres, and our beloved Scanlon Creek Forest were essential considerations for us.”
4. Financial benefits
Real estate can offer financial benefits, such as tax deductions, equity buildup through mortgage payments and the opportunity to leverage assets for future investments or loans.
5. Hedge against inflation
Real estate is often considered a hedge against inflation since property values and rental income tend to rise with inflation over the long term. This can help protect the purchasing power of the owner’s wealth.
“I am finding buyers are being more cautious,” says the REALTOR®. “Their after-tax dollars are seeing pressure from a day-to-day lifestyle stance and their household income faces stress test qualifying, which limits their purchasing power and their ability to save. This translates to feeling like their goals are further away than ever before.”
Waiting until 2025 or later seems like a safer idea for many, however is there any guarantee that conditions will be more favourable then? “There is a widespread belief that waiting for the housing market to crash or interest rates to fall will create ripe conditions for entering the housing market,” says Dias. “We do know that the Bank of Canada Governor, Tiff Macklem, said in his latest news conference that a June rate cut was ‘within the realm of possibilities’.”
Of course, the BOC does not, historically, tend to make large interest rate changes; small changes and longer periods of no change are much more common. “The pandemic was a rare occurrence where lower rates were used to stimulate the economy during a time of uncertainty,” says the agent. “However now, with persistent inflationary pressures, it is clear that rates may not drop as fast as some might have expected.”
Former BOC Governor Mark Carney is warning of ‘slower and shallower’ rate cuts. What is more relevant for most individuals and households, he says, is that in the medium term rates are going to be higher, and they are going to be higher because of structural reasons.
Dias also believes that the view of home ownership needs to change.
“There’s a saying in the real estate industry that I believe represents this moment in time: Marry the house, date the rate,” he says.
“While the real estate market has seen remarkable returns in the past decade, it’s crucial to adopt a long-term outlook on home ownership. Money, though significant, shouldn’t be the sole motivator. Family, cherished memories, lifestyle preferences, pride of ownership and safeguarding against inflation are equally vital factors to weigh when considering home ownership.”
Tara Sher is a Mobile Mortgage Specialist from RBC in Bradford. “Buying now presents the opportunity to potentially reduce your overall long-term mortgage costs, especially in a high-demand, low-supply market. While current interest rates may seem higher in the short term, waiting a year or two to enter the market could result in increased expenses,” she warns.
As always, it’s important to get informed. When the time comes that you’re planning to purchase a home, work with an experienced REALTOR® who will take the time to educate you and work with you to create a plan. Surrounding yourself with a team of professionals you can trust is key.
Dias highlights the availability of current government programs as invaluable resources worth exploring and leveraging.
Says the REALTOR®, “Take advantage of the resources at your disposal to craft a plan or framework that paves the way for the life you desire. Time spent in the market is paramount. Start now to seize opportunities and lay the groundwork for your future success.”
For more information, visit The Dias Group or call 905-716-5026. You can also follow them on Facebook.
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