Having established that the real estate market is back on track after its slight hiccup at the end of 2008 and with the economy appearing to do much the same, the media focus has finally moved on to another related topic. Canada's recovery has outpaced the world's developed countries, so mortgage rates are now the focus.
Low and affordable rates made a contribution to the flurry of demand for homes in a marketplace that still continues to see limited inventory.
Some banking and lending institutions have already started increasing lending rates in anticipation of the Bank of Canada reporting positively on the state of the economy and setting a higher interest rate in mid-April. Economists expect the rates to rise between half a percentage point and a full point to fight inflationary pressures in the economy.
We can expect that an increase, however small, may result in slightly more subdued real estate market activity after July. However, for the next few months we could have strong demand caused by an influx of buyers and sellers hoping to pre-empt the July 1st introduction of the Harmonized Sales Tax (HST) in Ontario.
Both potential buyers and sellers continue to ask, "Should one enter into today's marketplace?" Like most buy-sell situations it all depends on your motivation. It is safe to assume the cost basis for building new homes will ultimately dictate home prices once we move beyond issues of supply and demand. It is important to appreciate that sales prices reflect current market value and although increases in property values have been forecasted to slow down in 2011, it should be noted that real home prices increased an average of 5.2% a year from 2000 to 2009 - the strongest period of price appreciation in fifty years.
When you are ready to buy a home or sell a home, it's the right time for you! I'm ready to help and am just a phone call or e-mail away.
Monday, April 5, 2010
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