By Remitbee - Feb 15, 2022
If you are planning to buy a home in Canada this 2022, it is predicted that throughout this year, the prices of homes in the country will keep on rising. In 2021, prices of homes in Canada skyrocketed because many people staying home due to the pandemic have felt the need to move into a bigger house. With a growing demand for homes and a limited number of inventories, Canada’s housing market last year experienced a housing bubble that will continue growing.
At the beginning of 2022, it is seen that Canada’s housing inventory is still scarce. However, in the succeeding months of the year, it is expected that there will be an increase in the supply of houses in Canada as more home construction projects will be completed throughout the year. But it is also predicted that the inventory of homes in Canada by 2023 will further increase with the growth of building permit issuance in the past year, making the residential construction boom continue.
If you are decided to buy a house this 2022 in Canada, expect that there could be some storms you have to weather before you can rest at the residential haven of your choice. Here are some of the challenges that can make it difficult for you to get your dream home this year:
As mentioned above, there is a high demand for homes in Canada and a limited supply of them. That is why, if you want to buy a house this 2022, you have to do your best to find the perfect home that fits your needs and wants that are within your budget.
Let’s say you’ve found the perfect home. The challenge now is to outbid the large pool of homebuyers who are keen on owning a house like you. Because there’s a decline in available homes in the market, make sure not to fall into the risk of buying a home just because it is the one available. If you fall into this trap, you can regret buying this house and incur unwanted adverse effects on your finances. It is best to wait patiently until you find a home that suits you best.
Supply and demand affect the price of properties. With the ongoing increasing demand for homes and a pretty limited supply of houses available for sale, the cost of houses is up. In fact, financial institutions predict that prices of houses will continue to reach new heights in the coming years, not only this year.
If this is going to be the trend, first-time homebuyers and low-income households may be forced not to pursue their dream of owning a home this year.
As the prices of homes in Canada increase, so does the mortgage. This 2022, mortgage debt may increase by over 10% year on year. The Bank of Canada, RBC Economics even predicted that both fixed and variable mortgage rates are on their way up this 2022.
If you think that this will cause a decrease in borrowing money from banks and financial institutions, think again. If you back out on getting a mortgage this year, expect that you may be replaced by those who are waiting for their turn to get a mortgage loan to secure their dream home.
At the end of the day, these challenges are all dependent on one factor: money. If you have the budget, no matter how high the price of your dream home is, so long as you can afford it, you can purchase it, even on a mortgage loan. This growing housing bubble in Canada will burst once homebuyers realize the massive gap between the value of the home they want to buy and the amount they are willing to pay for it.
This 2022, the Canadian government is expecting to welcome 411,000 new immigrants into the country The arrival of immigrants will, too, affect Canada’s housing market this 2022 as you have new competition when it comes to buying an available home in the country.
True, these newcomers will rent in their first few years of stay in Canada, but once they have enough money, they can also be homebuyers in the years to come, making the competition for home buying even more intense.
The decision is up to you. Canada’s housing market this 2022 will not be as crazy as 2021. However, expect that not much will change this year. What is important is that you find a home that suits your needs and falls within your budget. If you feel that you need to save more instead of paying high mortgage rates this year, perhaps you can consider buying a home in the coming years when more houses will be added to the inventories, making the supply and demand for homes in Canada more balanced.
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