As the pandemic continues to affect the housing sector, market behavior will remain unpredictable. As Cressman Management Company explains, buyers may buy properties for higher prices. But they, especially first-time homeowners, may also hold off on buying for now.
Nothing’s set in stone for the housing market this year. But assuming that the current conditions stay consistent, here’s what some experts predict about Canadian real estate.
Canadian Real Estate Projections
The new work-from-home setup has been the driving force for housing demands to shoot up. Because people had to stay home, they wanted to make sure that their living spaces were multifunctional.
This caused a big chunk of their expenses to be allocated to home improvements. Some people who had enough savings opted for moving into a new home altogether.
This behavior became a pivotal point for real estate. It’s where Canadian real estate projections are heavily based on.
If this continues in 2023, demand for real estate will continue to be high for most cities. Home prices may keep rising, but homes will get sold faster. 2023 is expected to remain a seller’s market for Canada.
3 Real Estate Trends to Watch in 2023
Given the current situation, here are the real estate trends in 2023 that you have to watch before deciding on whether it’s the right time for you to buy a home.
Rising Mortgage Rates
The federal government is expected to raise interest rates later this year. Because of this, mortgage rates are now starting to go up as well.
This may be a turnoff for those who are looking to buy a home this year. Higher mortgage rates would also mean that you’ll have to pay a higher monthly amount for your home.
If you’re running on a tight budget, that home you’ve been eyeing may be out of your budget because of higher-than-expected mortgage rates. You could give up on buying a home altogether or you could look for cheaper options.
Consult with a real estate agent to find out the best course of action. If you really have to buy a house, try to do it as soon as possible, before the rates go any higher.
Demand Outpacing Supply
Demand is expected to keep outpacing supply. A lot of people now have the means to buy homes—and they are adamant about it.
The housing supply still cannot keep up with this fast-growing demand. The building of new homes cannot be finished any faster without compromising the quality.
Home prices are shooting up. People are putting in higher offers for homes just to secure them. Sellers are able to sell their properties almost immediately.
And still, the demand remains aggressively high.
Buyers Flocking to Smaller Towns
Because the new normal consists of work-from-home or hybrid setups, people are more willing to move away from downtown areas.
Smaller towns have a much cheaper housing market than those in the metropolitan areas of Canada. The atmosphere in these small towns is also quieter and more peaceful. If you’re looking to recharge after an exhausting day, a small town can give you the relaxation you need.
There has been a rise in the number of out-of-province buyers for the past year. Local markets also tend to get competitive. Buyers get into intense bidding wars just to secure a home. With out-of-province buyers entering the local scene, the market gets all the more competitive.
Out-of-province buyers are also more willing to put higher offers on properties since they have the means for it. If they buy a property in a city, they might only get a small apartment. But if they buy a property in a small town, they could score a beautiful detached house and still have money to spare.
Canadian Real Estate 2023
Canadian real estate will continue to be hot in 2023, but it will also start to cool down. Homes will sell faster and for higher prices. But this market behavior might turn off some buyers and reduce the demand a little.
Before locking in your offer on a home, watch out for these real estate trends that would probably come up in 2023:
- Rising mortgage rates. This might discourage homebuyers, especially those on a tight budget.
- Demand outpacing supply. This will drive home prices up and make them less affordable. But it could finally start bringing the demand and supply in equilibrium.
- Buyers flocking to smaller towns. This will make the local market scene more competitive. Be prepared to get into bidding wars.