Is It Better to Buy a Home Now or to Wait?

The real estate market has been in an uproar throughout the COVID-19 crisis and its aftermath, shaking up homebuyers looking for a future home. A recent Scotiabank survey shows that more than half of Canadians between the ages of 18 and 34 have decided to put off buying a home[1].

With so much uncertainty, the question on everyone’s lips is: is it better to buy now or wait until the situation calms down? In this article, you will discover the factors that will certainly influence your decision.

 

1. Property Prices

Many future buyers are wondering whether property prices will decrease or continue to rise. According to Charles Brant, Director of the Market Analysis Department of the Quebec Professional Association of Real Estate Brokers (QPAREB), the boom in property prices a thing of the past. However, it is not over yet.

In fact, the QPAREB’s October 2022 monthly statistics confirm a deceleration in price declines and a sharper slowdown in sales estimated at 35% when compared to the same period last year[2]. In other words, price increases should continue, but at a much slower pace. While prices have risen by approximately 20% over the past year, they are expected to increase by about 10% to 15% over the next few months[3].

2. The Overbidding Phenomenon

The overbidding phenomenon may also slow down significantly[4]. Future buyers will be able to explore the various properties on the market more rationally, without having to rush to make an impulsive offer.

Furthermore, experts are predicting a decrease in demand, which should lead to more favourable conditions for buyers who would like to avoid overbidding.

3. Rising Interest Rates and Inflation

The upcoming rise in interest rates is likely to slow the housing market[5]. According to Charles Brant, this reality - combined with the inflationary context - will affect the purchasing power of future homeowners. These two factors are the main reasons for the drop in sales observed over the past few months[6].

In this context, many buyers will probably be cautious and wait until the current situation and market conditions stabilize. Moreover, Vincent Déziel, Regional Vice President, Eastern Canada, at Scotiabank invites future homeowners not to underestimate the rise in interest rates, especially if they opt for a variable rate mortgage[7].

To sum up, the decision to buy now or to wait until later essentially depends on your personal situation and your financial capacities. By setting medium- and long-term goals, you can make the purchase of a property a reality while maintaining your lifestyle. In the meantime, consult the QPAREB’s barometers and detailed monthly statistics to see how the market is evolving. When you’re ready to act, ask a real estate broker for help. They can guide you through the process and help you find the perfect property with the best possible conditions.

 

See also:

• Questions to Ask When Visiting a House
• Rising Interest Rates: How Do You Adapt?
• How Can I Take Advantage of the FHSA for My First Home Purchase?