Thinking of buying a home? Well, 2020 could be your year! Real Estate experts across the country are optimistic this year will see an upswing in the market, and more first-time homebuyers will have the keys to their new front door.
Here’s what we know: 2018 and 2019 got off to a slow start, but 2020 has already proven to be a year with positive surprises. Here are some market trends that may sway your opinion and have you headed to your favourite real estate agent.
1. Lower Mortgage Rates
The Bank of Canada's five-year benchmark qualifying rate dropped last year. Why is this important? Benchmark rates are interest rates set by the bank of Canada that are useful in financial contracts such as mortgages. Make sure you talk to your Real Estate Professional or Mortgage Broker to discuss your eligible rates.
When we see fast economic growth and higher inflation combined with low unemployment, mortgage rates tend to rise. When the economy is slowing down, inflation falling and unemployment increases, mortgage rates tend to decline. It gets tricky when these economic trends don't co-exist.
Economists are forecasting a slower economy as the year progresses due to challenges in the export market and international trade. That's actually good for mortgages. However, the national unemployment rate is low and expected to stay low as the demand for skilled trades continues to rise. Despite the discrepancy, the Canadian Real Estate Association remains optimistic.
2. BC Assessment
In Vancouver, housing prices have experienced a slight dip in pricing in some areas due to the BC Assessments released in January. This lowering of assessed value in some regions bodes well for buyers who are trying desperately to find affordability in an area that boasts some of the most expensive homes in the country.
3. More Secure Long-term Investment
There are some great financial incentives only available to homeowners. If you currently own or are thinking about buying, make sure you take full advantage of things like possible tax breaks and incentives, building equity, new housing rebates and more. Read this for a closer look.
4. Millennials Looking for Good investment
Now that Millennials are into their late 20s and 30s, they are moving away from rentals and entering the world of homeownership. Millennials now make up the single largest group of Canadian homebuyers.
With recent changes to the Stress Test, the BC Assessments causing prices to drop in that region, first-time homebuyers’ programs and incentives, and lower interest rates across the country, the planets are aligning in 2020 for millennials to break into the housing market.
In a recent interview with the Vancouver Sun Ashley Smith, president of the Real Estate Board of Vancouver says affordability is a critical factor for millennials when it comes to buying a home (especially) in the Vancouver region, adding that a condo may be an attractive option.
"While many people still dream of owning a detached house, others prioritize an urban setting over the traditional white picket fence. I do think there is a shift for many millennials more towards lifestyle rather than square footage," Smith says.
In addition to price, Millennials are the driving force for technological advancements in the Real Estate industry and industry trends. Environmental footprint, electric car plug-ins, sustainability, and green space are all factors that come into play for millennials.
5. Expand Your Search: Get More Bang for Your Buck
We all know the location of your home can have a significant effect on its price. By looking slightly outside of a popular neighbourhood but still within its reach, you can increase the affordability factor, get into your home sooner, and experience more bang for your buck.
Not only will you find more housing affordability, but you may also see a decrease in property taxes. In addition to the price, location is often close behind. Once all the musts are checked off your list, like schools and amenities, spreading your wings just slightly outside the preferred area may give you many benefits without sacrifice.
Most real estate professionals and economists agree that 2020 has a bright future for the industry. Convinced the timing is right for you to take the leap into homeownership? Contact an agent today or check out previous articles to help in preparation and process:
- What is the Formula for Calculating a Monthly Mortgage Payment?
- How to Save for a Down Payment: 7 Tips from Financial Experts
- Mortgage Pre-Qualification vs Mortgage Pre-Approval vs Mortgage Approval
- What’s Better for You? Fixed-Rate Mortgages vs Variable-Rate Mortgages
- How to Qualify for a Mortgage as a Self-Employed or Small Business Owner