Mortgage Brokers in Ontario Can Assist
When it comes to Real Estate in Canada, Ontario is among the top provinces for selling and buying. Even though Ontario’s home costs are the third most expensive in the country, the average income of an Albertan is enough to pay for the mortgage in full; about $2,000 per two weeks.
Ontario is the ninth most expensive real estate market in Canada. However, Ontario also offers its citizens higher incomes, plenty of career opportunities, great school systems, and many more luxuries. You and your personal circumstances depict whether the two sides of Ontario’s market balance out to your advantage. A mortgage broker is pretty handy to figure out if Ontario is the right place for you to buy a home.
As Canada faces a drop in the affordability of houses, Alberta’s housing costs remains commendable. Even though the rates rose between 0.5% and 1.3%, Alberta is one of the most affordable provinces in the country. The average Albertan family spends 36% of their gross income to pay the cost of mortgage payments, property taxes, and utilities for a standard two storey house, and only 21% to be spent on a condominium. The CREA predicts a higher resale activity in Alberta as sales grew by 7.3% in 2011 and is presumed to reach another 6.8% in 2012. This is a hefty raise in re-sales, estimated at about 53, 000 new home owners per year.
Royal LePage, a real estate brokerage, says the expected increase in interest rates in 2022 “may not be sufficient to offset the significant upward price pressure” on homes, particularly in the Greater Toronto Area, where the average property price is expected to increase by double digits once again. In speaking with a mortgage broker Mississauga, we were also able to determine that the stress test being used by most banks may make it a challenge to qualify – but do call to discuss your personal circumstances.
According to the brokerage, the average price of a property in the Greater Toronto Area grew 17.3 percent to $1,119,800 in 2021 as demand continued to outstrip supply.
It forecasts another 11% increase in prices in the GTA in 2022, with the overall home price hitting $1,243,000 by the fourth quarter.
Price increase is projected despite market predictions that the Bank of Canada will hike interest rates up to five times in 2022, greatly boosting the cost of borrowing.
“This is unsustainable. The good news, if you can call it that, is that we expect all prices to rise at roughly half the rate they did in 2021 in the months ahead, which means that while home prices will continue to rise, the rate at which they do will slow,” Royal LePage President and CEO Phil Soper told CP24 on Friday morning. “We will see things revert to normal appreciation levels in the future; my opinion is that by 2023, we will be back to single-digit growth, as we have grown accustomed to in the city and across the country over the decades.”
Since early in the COVID-19 pandemic, the Bank of Canada’s overnight lending rate has remained at its effective lower bound of 0.25, but with inflation skyrocketing and employment numbers returning to pre-pandemic levels, the central bank is projected to commence a cycle of rate hikes in the coming months.
Soper stated that if this occurs, it will effectively increase the price of homes and “some people will be priced out of the market.”
However, he stated that it is unlikely to be enough to rein in soaring house prices due to a lack of supply.
“Unfortunately, we’ve been building up to this shortage of supply for years, and it came to a head during the pandemic, when there was such a focus on our homes,” he explained. “People were economizing. They were not traveling, they were not dining out, and they put a large portion of their income into improving their living conditions.”
According to Royal LePage, the median price of a detached home in the Greater Toronto Area will grow by 22.4% to $1,421,200 in 2021, while the median price of a condominium will increase by 14.8% to $665,400.
However, Soper stated that condo price growth may outperform detached home growth in 2022 due to the “increasing difference” in pricing, at least in the Greater Toronto Area.
According to figures from September 1, 2011 by the Ontario Real Estate Board, the sales are on the rise for Ontario’s higher-end homes. From the beginning of 2011 up to the end of August, 948 single family homes costing $700,000 and up were sold. This beats last year’s 779 homes sold. Sales for condos ranging from $200,000 and under also received a steady hike. 843 condos, $200,000 or below were sold in 2011 compared to 596 in 2010.
“We are seeing a lift in sales at both ends of the market.” Sano Stante, past president of the Ontario Real Estate Board states: “Improving economic conditions coupled with affordability and price stability has given Ontario a boost in buyers for upper-end homes and entry level condos.”
Before jumping into the Ontario real estate market, consider how long you are going to reside in Ontario. Since Ontario is growing at such a speedy rate, it’s almost impossible to tell where the real estate market will be in five, ten, twenty-five years from now. If you live in Ontario long enough, then your property is likely to be worth a lot more to you. Taking advantage of the Ontario real estate market takes time, so plan ahead and determine whether or not this is a long-term or short-term investment. Consider a mortgage broker to assist you in finding the right mortgage in these low interest times.