18 Jun

The Canadian housing market is entering a phase that may very well be confusing for first-time homebuyers.

General

Posted by: Rabinder Dhillon

We are suddenly in an environment in which interest rates are on the rise and the hot housing market is cooling off. Should buyers jump into the market before rates march further upward or should they wait for housing prices to decline?
 
In the first quarter of 2010, housing prices were setting record levels around the country and sellers still had the upper hand over buyers, with bidding wars erupting in some markets. There were a number of factors driving the boom. New mortgage rules, scheduled to take effect April 19th, that raised the threshold for qualification drove some buyers into the market. Others rushed in to beat the effect of the coming HST on new homes in Ontario and British Columbia. The anticipation of higher mortgage rates also encouraged some to leap in and secure lower rate mortgages.
 
Now that many of those buyers have bought their homes and the Bank of Canada has started hiking rates, the housing market is slowing down, perhaps faster than anticipated.
 
Click here to read more in the Globe and Mail.