Confinement, telecommuting, business closures, travel interruptions and many other restrictions have influenced many people's decision to buy or sell a home. Here are a few trends to watch in the coming year.
PRICE INCREASES: POTENTIAL RETURN TO A MORE MODERATE PACE
The number of real estate transactions reached record levels during the pandemic. It is in this context of strong demand that an increase in the average selling price of all types of properties was noted, particularly in the vicinity of Montréal.
The low supply of homes and low interest rates may continue to put pressure on home prices well into 2022. Even if price growth were to moderate, first-time homebuyers could still find it difficult to purchase a home. This trend has led to more risky behavior.
"Buying a home takes preparation. It's in the best interest of clients to seek the services of professionals to budget, get pre-approved for a mortgage, conduct a pre-purchase inspection and plan for all the costs associated with their real estate purchase." - Nadine Labbé, Vice-President, Retail Financing Solutions, National Bank
RISING MORTGAGE RATES
Predicting the direction of mortgage rates is risky because they depend on the market and the economy in general. There is reason to believe that interest rates should rise gradually over the next year. According to the Bank of Canada, the first rate increase could come as early as the spring of 2022 when inflation could last longer than expected. Borrowers should therefore consider their needs and preferences as well as a variety of factors when choosing a fixed or variable rate financing solution, including their tolerance for rate fluctuations; their ability to handle higher payments; and their plans for the future.
CONTINUED POPULARITY OF CONDO BUYING
As a result of telecommuting, many households have rediscovered the pleasure of having access to nature. Some wondered if the condo market would suffer.
"The condo still seems to meet the specific needs of targeted clienteles, namely young urban professionals, students with financial support, real estate investors or first-time buyers, who can hardly afford a single-family home, especially in large urban centers." - Nadine Labbé, Vice President, Retail Financing Solutions, National Bank
RURAL EXODUS SLOWING DOWN
While the pandemic has stimulated demand in suburban and rural areas, the return to socializing habits may attract buyers back to downtown areas, especially young people. Walkability, access to restaurants and entertainment, and neighborhood diversity may once again become priorities for these individuals.
The trend of moving to the slightly outlying suburbs has persisted for several years, in part because of the high cost of housing in the city. The pandemic has accentuated this movement as some buyers have made the leap to rural areas. Many families who had in mind moving out of the city have accelerated that plan due to mandatory telecommuting and containment.
"We are seeing a decline in the rural exodus craze. However, flexible work policies and hybrid work styles may give buyers pause. While many big-city families continue to move out, this trend could level off and slow down when the economic life of downtowns picks up." - Nadine Labbé, Vice President, Retail Financing Solutions, National Bank
THE IMPACT OF THE IMMIGRATION RECOVERY ON THE RENTAL MARKET
Real estate demand is supported by population growth, which in turn is largely driven by immigration. The decline in immigration in 2020 has not weakened property prices or resale activity.
The majority of newcomers to Canada tend to become renters. It is only after a few years that they begin the process of acquiring a property. The expected resumption of immigration in 2022, with new targets announced by the federal government, could therefore have an effect on rental demand in the short and medium term, and not on the purchase and sale of homes; this effect will be seen in the long term.
In fact, rental housing starts in Quebec reached a peak in 2020 and are expected to remain high through 2023. Despite this increase in supply, immigration and the arrival of foreign students is likely to increase demand just as much, contributing to the maintenance of high prices in the major centers.
Nadine Labbé, Vice President, Retail Financing Solutions, National Bank
Nadine Labbé has held strategic positions in the banking industry for over 20 years. She joined National Bank in 2009, where her creativity and leadership have helped develop the Payment and Credit Card Solutions business. Today, she is responsible for guiding the evolution of products and communications within Retail Financing Solutions.
Source : Article on lapresse.ca
Link : https://plus.lapresse.ca/screens/3345e4de-99b0-4166-9bd9-d63d9c40ab46__7C___0.html
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