Home Buying

Homeownership in Canada

Homeownership in Canada: What to Expect

Homeownership in Canada 

When it comes to homeownership in Canada there’s a lot to know and to prepare for. It can sometimes be difficult for young prospective buyers new to the market. This is due to the rising housing prices that we’ve seen over the past few years. 

There was a high demand in 2020 but a low inventory which caused the housing prices to rise. This created what we call a sellers market, meaning that the seller can look for the best offer on their property, causing the seller to go for the best offer. This is usually higher than what the asking price was to begin with. 

In a 2016 Canadian census, it was reported that in the year 2000 the rate of homeownership was just below 64 per cent and increased to 68.55 per cent by 2020. This was based on a group ages 55-64. “The 2016 Canadian census provided some helpful information for professionals and homeowners alike. While the data is from several years ago, it still provides a solid snapshot of what home ownership is like in Canada.”

It was also reported that, “78% of homeowners are couples, some with children and some without. Royal LePage Signature Realty also reported that around 48% of young buyers in the 25-35 age group owned their own home. As well, 92% of these young people have a positive association with real estate investments and believe that purchasing a home is a good financial investment.”

This census also indicated that many of these homeowners had a higher education than secondary school and had a higher income. It also indicated that this group of homeowners had responsible spending habits. As of 2022 we know this may have changed because there have been many individuals that have been affected by the ongoing pandemic.

Real Estate Market Statistics 

While it is true that the ongoing pandemic has had an impact on many industries and the economy, real estate saw on of its biggest booms. According to the Canadian Real Estate Association (CREA), there were a reported 551,000 homeowners that were able to purchase a home in 2020 and 2021. The pandemic caused mortgage rates to drop which lead to low borrowing rates and also low interest rates. 

“Because of this, many buyers realized that they could purchase a home and lock in a low interest rate with a low monthly mortgage payment. This led to high demand for houses and a shortage of houses on the market.”

COVID-19 and the Real Estate Market

It was also reported that the pandemic caused there to be more out of town buyers. They were purchasing residential properties outside of the larger cities to move to more rural locations. Due to this we saw the median cost of residential property rise 52.9 per cent in places such as Muskoka to $625,000. 

While some chose to still buy and sell during the pandemic, there were some who decided not to make any moves. This was due to the fact that for a while there were no in-person open houses and everything was moved to online. However, it was still reported that 84 per cent of potential new homeowners stated that they still plan to buy a new home in the near future. 

When it comes to the affordability of housing in Canada there’s a lot to consider. According to the CREA, the average price of a residential property rose more than had been previously predicted. By mid 2021 the price had risen to over $700,000.  

This rise in the price of a residential property caused there to be an increase in monthly mortgage payments, causing there to be a rise in the downpayment. This then caused there to be less entry level housing for new homeowners. We can take a look at the December 2021 real estate market statistics to see what it was like for buyers in Burlington, Ontario. 

Burlington Real Estate Market Statistics for December 2021

According to the REALTORS® Association of Hamilton-Burlington (RAHB), there were a total of 811 sales of residential properties in the entire RAHB market area. Sales in the area saw a decrease of 32 per cent since the previous month, and an 11 per cent decrease compared to the same time last year. 

In December 2021, it was reported that there was a 50 per cent decrease in new listings when compared to November 2021. There was a six per cent decrease in new listings since December 2020. The average price of a residential property was $931,787 in the entire RAHB market area. This was a two per cent increase compared to the previous month and a 27 per cent increase compared to the same time last year. 

In Burlington, the price of a residential property was $1,221,317 with a total of 136 sales. This was a 26 per cent increase when compared to the same time last year. The median price of a home in December 2021 was reported to be $1,155,000, which is a 36.9 per cent increase. 

“December 2021 saw a new residential average sale price record to close out the year. The number of properties changing hands in December did not rival the momentum from December 2020, however, we have never seen the months of inventory and active listings available this low before. Generally, most people wait until after the holidays to list their homes, but with approximately 300 residential properties on the market heading into 2022, we are expecting to continue to see tight conditions with such low levels of supply.” RAHB President Lou Piriano

Contact Lori VanDinther and Team

There are a lot of real estate statistics talked about in our blog this month, it’s important to see what’s going on in the market. This way we can better understand why prices and mortgage rates are they way they are. If have any questions about these statistics my team and I would be happy to help. 

You can contact us, we love getting to connect with our clients, to help you find the home of your dreams in Burlington, Ontario and surrounding areas. Please contact me either by email at info@loriv.com, or by phone at 905-632-2199.  

Mortgage Lender

Choosing the Right Mortgage Lender

Finding a Mortgage Lender 

When it comes time to shop for a mortgage lender it can seem daunting and stressful. However, there are multiple companies that are able to help you through the process and interest rates options. The whole process can sometimes feel really overwhelming and that’s why a mortgage lender or specialist can help you make the right decisions. 

There are three different type of mortgage lenders in Canada. The first one is the “Lender A,” which are the traditional lenders, banks and credit unions. Typically this lender is for those who have good credit scores and a steady income. 

Next is the “B Lender,” they’re able to offer a lower barrier for the borrower. The borrower may not have qualified through the bank or credit union. Finally there’s the “Private Lender,” which is for borrowers who have lower qualifications than the A and B lenders. 

“While banks and other major financial institutions are considered to be A lenders, monoline lenders also fall under this category. Unlike banks who offer multiple services like credit cards, investments and bank accounts, monoline lenders specialize primarily in mortgage loans.”

It’s best to start by looking for a mortgage broker, as we mentioned above, they can offer you recommendations on what type of mortgage is right for you. You can then compare all the options and go with the one that suits your life and income situation. This is also possible to do online, you can compare interest rates and terms. 

What to Ask Your Mortgage Broker & Lender 

It’s important to understand the interest rates and terms with your lender. This way there aren’t any surprises. Some questions you should consider asking are about your payments, property taxes and mortgage options. 

This is because each mortgage lender will have their own policies, your broker will be able help you understand their guidelines and terms. Then they’ll be able to help you determine which lender will suite your needs best. 

It might also be helpful to ask your broker what lenders they think would be best for you. It’s also a good idea to ask your broker the difference between a bank and moonline lenders. This will help you figure out payment privileges, which is usually the biggest difference. 

“Borrowers may also want to ask about extra payments on your mortgage and how many you’re entitled to per year, the mortgage renewal process, and if your lender allows property taxes to be collected with your mortgage.”

Another good question to ask would be about any penalties if you choose to pay out your mortgage early. This could impact the length of your mortgage term and the interest rate. Its important to know the interest rate penalties.  

Choosing the Right Lender 

There’s a lot involved when you’re choosing the right lender. It can be more than just about rates and terms. It’s important to make sure they have good customer service and can communicate well. 

With any service or company, you want to make sure that you’re treated well and that issue, of there are any, are resolved. It’s “important for lenders to have a good online customer portal. This is where clients can make payments, gather mortgage statements, and get other detailed information.” 

Contacting Lori VanDinther and Team 

If you need advice about mortgage lenders or brokers, we can help. If you have any questions about the current real estate market my team and I are here to answer them for you. 

We love connecting with our clients, our goal is to help you find the home of your dreams in Burlington, Ontario and surrounding areas. Please contact me either by email at info@loriv.com, or by phone at 905-632-2199. 

Canadian Real Estate Market

The Canadian Real Estate Market 

Canadian Real Estate Market 

In a recent report by the Canadian Real Estate Association (CREA), the Canadian housing market may have reached it peak. While some markets are still experiencing record breaking gains, “these broad-based trends are spotlighting some crucial developments.”

This is some good news, since that means things could be returning to some what of a normal market. The question now is, will this help some Canadians get into the housing market or move up in the market. This is something that we’ll need to watch over the next few months to know for sure. 

“Whether you are of the opinion that the boiling Canadian real estate market has been reduced to a simmer, or that it is poised for a steep correction, it’s always prudent to analyze the numbers. In this case, the late summer figures that are emerging may suggest one thing: the peak happened months ago.”

Has the Canadian Real Estate Market Peaked?

This is the question we’re all asking ourselves right now, this is because the housing market has been very hot for quite some time. According to CREA, sales of residential properties had a 3-5 per cent decrease month-over-month since July. That decrease is the smallest monthly decline since March. However, since March housing transactions have decreased 28 per cent and 15-2 per cent on an annualized basis, in terms of unit sales on an annualized basis. What does this data mean and what does it highlight? 

“The data highlighted that the slowdown in the national real estate market was less broad-based as the drop in sales was concentrated in two-thirds of local markets, led by Calgary and Edmonton. Sales also moderated in places such as Montreal. But it should be noted that July 2021 sales were still the second-best month of July on record.”

When it comes to supply, it has continued to be an issue in the Canadian real estate market. This is because the number of new listings for residential properties had an 8.8 per cent decrease month-over-month in July. The largest decreases were in Vancouver, Calgary, Montreal and the Greater Toronto Area. This indicated that it has been a sellers market, “since it suggests the number of months it would take to exhaust demand at the present rate of sales activity.” 

The Canadian Real Estate Association also reported that, “housing starts totalled 286,620 units in July, down from 293,085 units in June. Single-detached urban starts jumped by 7.1 per cent, but multiple urban starts tumbled by 3.1 per cent. Rural starts were relatively flat at a little more than 23,000 units.”

Real Estate Cool Down 

Is this indicated the real estate market is finally cooling down? According to an op-ed in the National Post, sated that sellers are in fact turning down offers in hopes that they’ll receive a better offer. 

“Indeed, after seeing meteoric gains in recent months, many homeowners might believe they can wait until they receive a better offer. However, that higher bid may not come as many homebuyers have done one of three things: exited the market due to soaring costs, suffered buyer fatigue, or chose to wait until a correction intensifies.” 

It’s also been reported that some of these sellers are choosing to listen to their family and friends, rather than the data. This is according to some industry experts who also say that this is being done even though there is a lot of data out there. 

“While it is true that the Canadian real estate market remains robust as prices approach an average of $700,000, growth has ostensibly reached its zenith, at least for now. On the one hand, the price growth may have erected a multi-year barrier for young families and first-time homebuyers. But, on the other hand, at least many Canadians know what to expect as the housing market could eventually return to pre-pandemic conditions, especially in areas that have historically been more affordable.”

So what now, what happens next? It was reported that the Bank of Canada may rise the interest rates next year, making the real estate market is vulnerable to a rate hike. The next 12 to 18 months will be interesting for real estate agents and their clients as we watch the market. 

Contacting Lori and Team 

It’s exciting when you’re taking the step to look for your new home and I want to make sure that you have a wonderful experience. Myself and my team work hard to make sure that our clients are happy and in love with their new home. 

You can contact me either by phone to email and I will be happy to answer any questions about how mortgages work, and any others you might have. If you’ve been wondering what your home is worth, you can use my What’s My Home Worth calculator. I’m looking forward to working with you soon!