With real estate prices up all across Canada, and many rental prices increasing too, many residents are left wondering if the right time to buy is now. With housing costs high, whether your rent or you own, here are some considerations for purchasing a house in Canada:
1) Market could see a Decrease: Canada has seen a crash in the market before and many warn that the housing bubble could burst at any point in the near future. When home prices fall, residents can often be left with a home that is worth far less than what they paid. If the economy begins to slow down, the increase in housing prices could slow down as well.
2) Natural Resources can Limit Markets: Many cities are simply maxed out on the available land space and building up instead of out is the only option for new development opportunities. This leaves the market tight and as a result, home prices have seen an increase. This is particularly true in Vancouver and Toronto. Other areas, such as Calgary, have housing markets depending on how the land produces – such as oil. If oil prices fall, so could home values. Mother Nature can constrain and restrain the real estate market.
3) New Construction: As tempting as it is to get your foot into the real estate market with the purchase of a pre-constructed home, there are some concerns that you do not know what you will actually get as the end result. Whether it is an unknown on how the neighborhood will be developed or a question as to whom else will reside in the building next to your new condominium, there are some unknowns with purchasing from a plan and not from an actual finished product.
4) Old Construction: Old homes are charming and often reside in the most sought after neighborhoods. They also house a number of potential issues: sloping floors, rodents and termites, old lead pipes and paint, outdated building codes, ancient electrical wiring, small closets and even smaller basements. While some older homes hold the prestige of heritage designations, they also hold restrictions on what work can be done on the residence. Consider if you want to add your family history to an already storied home.
5) Transit Lines: Purchasing a home close to transportation lines can boost your quality of life and the value of your home. You may endure some construction phases as many cities add to their existing transit lines, but the hassle may well pay off in the end.
6) Length of Stay: Are you looking to stay for a long-term investment or is this a short-term residential fix? The longer you can stay in your home equals the greater equity and the less risk that you will need to sell your home when home prices are low.
7) Foreign Investors in the Neighborhood: Consider your prospective neighborhood and the residents that live there. Many foreign investors are purchasing properties all over Canada and as a result, many homes are sitting empty. If you want a vibrant neighborhood, look to visit during evenings and weekends and gather knowledge on the personality of the neighborhood.
8) Potential to Move Out and Move Up: If it is a stretch to purchase a starter home in your most desirable neighborhood, consider whether you might be able to move out and move up into a bigger home when the need arises. Having to say goodbye to your beloved neighborhood – and relocate – is far too often a reality for some when the time comes to search for a bigger home for a growing family.