Regardless of the type of investment, trying to choose the best time to buy is risky. Short-term price changes cannot be accurately predicted. It is better to simply choose your investment well and hold it for a long time.
Resale market
Sales in 2023 will be at their lowest total in about 20 years. In a recent study, Desjardins predicts that we will reach the end of the downward price cycle in a few months.
The regions that have experienced less or very little overbidding, namely those in the north, centre and east of Quebec, are doing better. In the Québec City metropolitan area, the decline in sales is more moderate and the inventory of properties for sale remains very low.
The expected decrease in mortgage interest rates and the decline in prices received will result in improved affordability. However, the expected decline in interest rates will not be sufficient to make affordability attractive enough to encourage a massive return of buyers to the market.
Some buyers are becoming scarcer
Although the rise in mortgage rates appears to be coming to an end, the monthly payments associated with paying off a loan have skyrocketed. Not surprisingly, first-time buyers, who typically have a small down payment, are significantly less likely to become homeowners.
Now that the price boom has given way to a correction and the cost of borrowing has risen, the appeal to investors, who used to account for around 20% of property sales in the country, has dissipated.
New construction slows
Demand for new homes and condominiums will continue to weaken as households' ability to borrow has declined significantly. In the rental segment, projects have become difficult to make profitable due to high interest rates and, as a result, construction is already slowing.
New housing construction, which fell by 15.8% in 2022, is expected to fall by 20% during 2023.
"Despite certain government programs, project financing has been a major challenge since interest rates have risen, resulting in the cancellation or postponement of some construction projects," says Hélène Bégin, senior economist at Desjardins Group.
Sharp rise in rents
With the difficulty of accessing property, the lack of available flats and a sustained recovery in immigration after the low level observed during the pandemic, demand will remain strong. On the supply side, the level of new flat construction is falling.
In this context, the provincial vacancy rate will continue to decline and could be around 1% in 2023, compared to 1.7% in 2022. No region is immune to the rental housing shortage.
Many areas are being affected by soaring rents as available flats are almost non-existent in many locations.
The tighter the rental market, the more upward pressure it puts on rents," notes Hélène Bégin. I notice that in Quebec, rents have increased by 9% between 2021 and 2022 and that the increase should reach 10% in 2023
Source : Article by Jean Sasseville on the lesaffaires.com on the 8th march of 2023
Link : https://www.lesaffaires.com/blogues/jean-sasseville/precipitez-vous-pour-acheter-une-maison/639632
You want to keep an eye on the market and your investment ?
We can periodically send you a list of sales in your neighborhood.
It's FREE! No obligation on your part.
