The perfect time to buy a home will vary depending on the season, market conditions and your financial circumstances. For instance, last year, Vancouver homes were the least affordable in the housing market due to high housing prices.
Fortunately, for first time home buyers, experts predict that the tides are turning. The housing market is expected to be more balanced in the year 2022. It doesn’t necessarily mean that home prices will drastically decrease, but unlike recent years, an improved housing inventory is expected next year. This means that home buyers will have more options to choose from as they shop for a new home.
Why 2022 is the Year to Buy a New Home
The pandemic has caused an unprecedented wave of setbacks in many industries, including the Canadian real estate market. Fortunately, forecasts and outlooks show that the housing industry will be returning to its normal state.
Grab the low demand
Shop around while it’s a buyer’s market. As opposed to a seller’s market, in a buyer’s market, housing prices and demand are low. A report forecasts that after the housing frenzy in 2021, home sales are expected to fall by over 12% across Canada next year. However, amid the anticipated decrease in housing demand, the shortage of supply still fuels significantly higher prices.
2. Home prices will slow down
The good news is, since the demand has started to decline after its tipping point during the height of the pandemic, the market’s expected to cool down a bit. Given this outlook in 2022, you’ll be able to find relatively lower priced homes – even in the more expensive cities across Canada, such as Toronto.
3. Relaxed pandemic measures
As the pandemic rules begin to relax, we’re starting to see the effect on the process of buying a home. In 2022, home buyers are expected to enjoy shopping around the housing market, sans the frustration of being outbid. This means that home buyers don’t need to shell out more than the home’s asking price due to multiple offers. Moreover, many realtors foresee that 2022 will reshape and moderate the real estate industry.
4. Evaluate your options
With the pandemic cooling down, it might be a good time to evaluate your situation. Your finances and responsibilities will play a role in choosing the type of home you’ll need. Before you buy, explore different areas and neighbourhoods that’ll best fit your work, family and most of all, your finances.
Essential Steps to Take Before Buying a New Home
Saving for your down payment and other expenses
A down payment is the amount of money you need in order to secure the purchase of a home. The amount for a down payment can range from 5% to 20% of the property’s value. So before you begin house hunting, check if your savings are enough.
The rule of thumb’s the bigger the down payment, the lower the monthly payment is or you can opt for a shorter amortization period. This mortgage affordability calculator can help you evaluate your payment.
Prepare your finances
Get pre-approval as early as possible
Once your finances and documents are ready, the next step is to get a mortgage pre-approval. A pre-approval gives you an idea of how much a lender is willing to loan you and what your payments can look like.
Final Thoughts Before You Buy a Home
The real estate market can be unpredictable, so entering the market unprepared can set you back and leave you scrambling for solutions. If you’re having doubts on whether it’s the right time for you to buy, speak to an experienced mortgage broker for help.
Based just outside the Greater Toronto Area, Daisy Raouph is a mortgage broker and financial security advisor equipped with over 30 years of experience in mortgage and financial services. Consult Daisy today.