Ladies and Gentlemen... Start your engines!
The Spring Market is almost here and it promises to be a unique buying opportunity for Canadian home buyers.
A confluence of a number of economic events has conspired to create an extraordinary buyers market.
Spring Market - Typically the Spring is when we see the most homes for sale as sellers endeavour to take advantage of the increase buyer traffic that is generated each spring as Canadians begin to shun their winter coats and boots and head outside to bask in the warmth of sunnier days and milder temperatures.
This should add to the growing inventory of unsold properties causing additional downward pressure on home prices. Already we have seen an average reduction in the 8% range and this could grow with the addition of listings in the marketplace.
More Choice - With more inventory buyers will have more homes to choose from. Whether it be a condo unit you desire or a freehold property, the selection this spring should be unmatched in recent memory.
Time to Consider - Although there are still some properties that will sell quickly and some properties that may even generate multiple offers, for the most part buyers should be able to enjoy a reasonable amount of time with their decision making.
Only a year ago there were bidding wars and quick sales offering the buyer little or no time to make an informed decision.
Interest Rates - As interest rates continue to fall home ownership becomes more affordable. A five year rate now stands around 4.4% and I have even seen it as low as 4.3%. With the promise of another rate reduction in early March and increased competion in the mortgage market we could be looking at rates in the 4% range.
Variable Rate mortgages are even less but be carefull with these types of mortgages as we are close to the bottom with respect to how low mortgage rates can actually fall.
10 Year Terms can be had for a little over 6% for those that like the idea of longer term security.
CMHC Insurance - Until recently, Mortgages in Canada were restricted to a 75% Loan to Value Ratio (LTV). That is to say, lenders could only lend up to 75% of a homes value after which the Government required the buyer to obtain mortgage insurance. So to aquire a conventional mortgage (one without the need for insurance) a buyer was required to come up with a 25% downpayment.
Today the LTV is 80% so a buyer only has to come up with a 20% down pament to secure a conventional mortgage.
By eliminating or reducing the CMHC insurance a buyer can save literally thousands of dollars.
Green Initiatives - This is great news for buyers as often new homeowners plan to fix up or renovate after moving in. Various levels of Governments have gotten on the environmental bandwagon with a number of programs and rebates aimed at energy conservation.
Be sure to surf the web before tackling your home improvements.
Additional benefits for 1st Time Buyers
If you are a first time buyer then the news just keeps getting better...
RRSP's - Each individual that goes on title with a home purchase is eligible to borrow up to $20,000 from their RRSP. (ie. a husband and wife, assuming shared title are eligible for up to $40,000)
This money can be used for a variety of expenses including down payment, moving costs, etc. (surf RRSP Home Ownership in the web)
Further to this, you have up to 10 years pay the money back to your RRSP.
Toronto LTtx Rebate - The much despised Toronto Land Transfer Tax is rebated to first time buyers to a maximum $3700.
I can't recall a time when so many economic factors aligned to provide Home Buyers with such an advantageous environment for purchasing a home.
