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Technology and community to play a role in 2017 mortgage market, expert says

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The Canadian mortgage industry continued to document growth by the end of 2016, but industry experts are predicting a slowdown in several key areas, thanks to changes in rules for government backed mortgages, the emergence of mortgage brokers as key players in the industry, improving technology and many others. Experts and stakeholders in the real estate industry have long expected the mortgage industry to come crashing down in 2017.

However, statistics indicate that while there may be a bit of a slowdown in the fast rising pricing and the number of homes purchased, demand for housing will continue to be high in many areas unless there is a sudden rise in interest rates or drastic change in mortgage lending standards. The following trends are predicted for the Canadian mortgage industry in 2107:

  1. Decline in sales activity
The Canadian Real Estate Association (CREA) estimates that there will be an average drop of 3.3 per cent in home sales in 2017, thanks to tightened mortgage regulations and the shortage of affordable housing units especially for single family homes. Sales activity is expected to decline in several areas including Nova Scotia (2.1 per cent), Ontario (2.7 per cent), Saskatchewan (1.2 per cent) and many other areas. is expected to favour consumers, who could possibly see a drop in house prices in some areas.

 

  1. Two sided market

Experts predict that the Canadian market will continue to exhibit a two sided nature, with demand in some parts of the country (Vancouver and Ontario) skyrocketing while other parts of the country experience low demand thanks to affordability issued.

 

  1. Creating communities

Canada’s urban populations will continue to grow, attracting millenials looking to build their careers, boomers looking to find a ‘nest’ for their retirement years, immigrants and many others. Real estate developers are taking advantage of the growing demand for urban housing to creating spaces that cater to the entire community’s needs such as shopping malls, schools, public parks, playgrounds, eating places and other recreational facilities. Governments are also encouraging the development of all inclusive communities around transit hubs so that people are able to work where they live and vice versamay have an impact on productivity.

 

  1. Declining affordability

House prices are expected to skyrocket in 2017 and beyond, effectively shutting out many people who would like to own a home in certain areas but lack the funds to do so. High demand for both residential and commercial space in Ontario, British Columbia and Montreal will continue to push prices up. First time home buyers and immigrants may be forced to settle for smaller housing units or shared housing in order to afford housing in Toronto, Vancouver and Quebec. In spite of all this, supply will continue to be low as developers look for affordable space to construct new unites. Proposed solutions to the problem of high demand and low supply have included lobbying government to release a percentage of the lands held for greenbelts for residential development, and agitating for the reduction in municipal red tape with regard to the approval process.

 

  1. Disruptive technology

Technological advancements in the housing market will continue to disrupt and displace existing products, stakeholders and markets. The availability of property information on the internet is making more potential tenants and buyers increasingly aware of their rights and the options they have in a particular market. People looking to buy or prices, property features, legal buying processes and varied other information with regard to real estate. This means that the buying public is more informed and therefore willing to wait until they find a property that fits their exact needs. On the bright side, disruptive technologies are making it easier for developers and property owners to present their product to potential customers. The use of 3D computer simulations of properties, for instance are doing away with the need for showrooms as potential renters and buyers can simply go online and view properties they are interested in from the comfort of their home or office.

 

Disruptive technologies are leading to the creation of smaller office spaces. A large number of people today telecommute and the use of co-working spaces means that workers no longer have to rent large spaces that are bound to be costly. Finally, the availability of residential technologies such as smart home systems, green appliances, environmentally friendly technologies such as energy efficiency and many others mean that developers now have to deal with customers who are extremely picky about the spaces they live in, and many property owners and investors are having to incorporate many of these features in order to attract buyers and renters.

 

  1. Longer term renting

The average price of homes in large cities like Vancouver and Toronto runs into the hwas $710,000 in Toronto. With home prices expected to remain in these high levels over the next few years, many people are choosing to rent rather than purchase properties in high demand areas. Renting is expected to become the norm in both Toronto and Vancouver as residents weigh the costs and benefits of renting vs. purchasing. Real estate building smaller units at affordable prices for renters. A trend has been noted among home owners who are opting to sell their homes and move into luxury rental units.

 

  1. Global changes

While Canada is seen as a low risk, stable investment venue, global changes such as Brexit and the US presidential election results have real estate stakeholders fearful of ripple effects that may affect the Canadian real estate market. Terrorism, the Middle East refugee crisis and the influx of up home prices and make property more inaccessible for Canadians.

 

  1. Fluctuations in gas and oil prices

Price changes in gas and oil have Alberta experience recession and a general decline in GDP. Low demand and an oversupply of commercial and residential spaces have seen investors’ record losses over the past couple of years, causing a general slow-down in real estate investment. Unless gas and oil prices improve, this trend is expected to continue but investment should start to yield good returns in the long run.

 
 
Let’s look at Ontario specifically for a minute…
Ontario, and specifically Toronto, Ottawa and some of the other larger cities in the province continue to experience economic growth. Statistics show that the Canadian real estate sector experienced a 46 per cent growth in 2016 and GDP remains at a constant 2.6 per cent for 2016 and 2017. Shortage of land for building has led to an increase in house prices leading to people choosing to renovate homes or rent instead of purchasing.
 
Navigating through the rules and regulations of the Ontario mortgage industry can be difficult especially for first time borrowers. However, the right mortgage broker will be able to provide the correct information and guide you in the process of acquiring the right type of mortgage. A good mortgage broker will be able to guide you on the various types of mortgage insurance, interest rates on different mortgage products, and many other variables. They will inform you on various factors such as the amount of down payment required in Ontario, the various types of loans available, the best rates and help you sort you through the various providers so that you can get the best deal possible.
 
Getting a mortgage in Ontario need not be a difficult and convoluted process. With the right information and help by your side, you can take advantage of the growing Ontario real estate market either as a buyer or an investor. Ensure to do your research, learn as much as you can about the Ontario mortgage market and pick the right partner in order to benefit fully from the province’s housing market.

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

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‘Don’t give up’: Ottawa Valley realtors share statistics, tips for homebuyers in ‘extreme’ sellers market

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The real estate market in the Ottawa Valley can be summed up this way: people from far and wide are in a buying frenzy, but there’s hardly anything to buy at the “store,” and the limited inventory is overpriced.

This “stampede” — as one realtor described it — will affect rural towns as residents grapple with finding affordable housing and agonize over their inability to purchase homes in their price range.

“We are seeing a lack of inventory in all price ranges,” said Laura Keller, a real estate agent from Carleton Place. HomeYou’ve been selected.Only $1.49/week for your first 4 months.Special offer just for you. Unlimited access.

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10 Tips For First-Time Home Buyers

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Buying a home for the first time is exciting and a commitment to the future. It’s often challenging, too, and the process requires a lot of steps, many of which can be tricky to navigate as a first-time home buyer.

What are some things you should keep in mind as a first-time home buyer?

First-Time Home Buyer Tips

Here are 10 tips to keep in mind as you begin your journey toward homeownership.

1. Have Your Finances in Order

It’s wise to begin saving as early as possible once you’ve made the decision to purchase a house. You’ll need to consider the down payment, closing costs (which often range from 2% to 5% of the down payment), as well as move-in expenses.

You also need to understand the other costs of homeownership, such as mortgage insurance. property taxes, utilities, homeowner’s insurance, and more.

2. How Much Can You Afford?

Knowing how much you can realistically afford in a home is another important financial consideration. Look for the home of your dreams that fits your budget.

One way to avoid future financial stress is to set a price range for your home that fits your budget, and then staying within that range. Going through the preapproval process will help you understand what price range is realistic for your budget.

3. Make Sure Your Credit is Good

Another thing to keep in mind as a first-time home buyer is your credit score because it determines whether you qualify for a mortgage and affects the interest rate that lenders offer. 

You can check your credit score from the three credit bureaus – Experian, Equifax, and TransUnion.

This is another good reason for getting preapproved before you start your search. Learn more about the preapproval process and your credit score.

4. Choose The Right Real Estate Agent

A good real estate agent guides you through the process every step of the way. He or she will help you find a home that fits your needs, help you through the financial processes, and help ease any first-time buyer anxiety you may have.

Interview several agents and request references.

5. Research Mortgage Options

A variety of mortgages are available, including conventional mortgages – which are guaranteed by the government – FHA loans, USDA loans, and VA loans (for veterans).

You’ll also have options regarding the mortgage term. A 30-year fixed-rate mortgage is popular among many homebuyers and has an interest rate that doesn’t change over the course of the loan. A 15-year loan usually has a lower interest rate but monthly payments are larger.

6. Talk to Multiple Lenders

It’s worth your time to talk to several lenders and banks before you accept a mortgage offer. The more you shop around, the better deal you’re liable to get – and it may save you thousands of dollars.

7. Get Preapproved First

Getting a mortgage preapproval (in the form of a letter) before you begin hunting for homes is something else to put on your checklist. A lender’s preapproval letter states exactly how much loan money you can get.

Learn more about the preapproval process and how preapproval provides you with a significant competitive advantage in our article How Preapproval Gives You Home Buying Power.

8. Pick the Right House and Neighborhood

Make sure to weigh the pros and cons of the different types of homes based on your budget, lifestyle, etc. Would a condominium or townhome fit your needs better than a house? What type of neighborhood appeals to you?

9. List Your Needs and Must-Haves

The home you purchase should have as many of the features you prefer as possible. List your needs in order of priority; some things may be non-negotiable to you personally.

10. Hire an Inspector

Hiring an inspector is another crucial step in the home buying process. An inspector will tell you about existing or potential problems with the home, and also what’s in good order. You can learn more about home inspections and how to find a home inspector through the American Society of Home Inspectors website.

Buying a home for the first time is a challenge, but it’s one you can handle with the right planning and preparation.

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A Simplified Guide for Toronto First-Time Home Buyers

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Toronto is the largest city in Canada, the fourth largest city in North America, which makes it an exciting place to live in.

But as with other major cities, finding the perfect place to move to can get tricky. If you’re planning on buying a home for the first time in this city, it is indeed a big decision and there are things you should know in advance.

Don’t worry, this guide will help explain the basics of what you as a buyer should know when you decide to buy a home. It will make you feel like a true expert during the buying process.

Decide what type of home you are looking for

There is no right answer to what makes a good home. It all depends on your preferences and needs as the resident. It is, therefore, a good idea to determine as early as possible which features of a home are important to you. If you are buying a home and moving in with someone, it can be a good idea for both of you to make a list and compare.

Toronto is a city that offers different styles of living accommodations and its neighborhoods are quite versatile and diverse, same as the people living there who come from all parts of the world.

The most common forms of housing and real estate opportunities in this city include bungalows, two-storey houses, split-level homes, and the very popular Toronto condos. Due to the high property values, the city boasts of construction of many condominiums as they are a more cost-efficient choice and provide a plethora of benefits.

When you decide on the type of home you want to buy, it is good to do some research and learn the biggest differences between them.

What to think of when choosing homes in Toronto

There are certain things you need to consider when choosing your home in this city. 

Being close to the things you need to visit every day makes life a lot easier. Pay attention to the proximity to shops, preschools, schools, and your job. In addition, access to good public transportation is crucial. Being able to move around the city easily and the opportunity to commute is important to many.

Know that having a balcony can significantly increase the value of your home and improve your well-being. Being able to move easily in the area is something that many people underestimate, but can be very convenient, and this is why you should see if there are good cycles and walking paths. 

And finally, make sure that the house is well designed which is a quality that does not disappear with the age of the house or with renovations. 

Set your budget

Before you start the search for your new home, you must know how expensive of a home you can buy. It is preferable to know in what price range to look for. The budget is usually decided based on your mortgage and how large are the monthly costs you can handle.

A mortgage is always about a balance between risk and income for the bank. The higher the risk for the bank to lend to a particular home, the more expensive the mortgage will be. When it comes to the bank’s reasoning when applying for a loan, it is in principle always a question of whether you as a borrower will be able to repay the mortgage.

The bank also takes into account your financial history. If you are a person who has managed your finances well, the chance increases that you will get your mortgage approved. If, on the other hand, you have a bad reputation with banks, it is weighed in as an aggravating circumstance.

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