Is a Recession a Good Time to Buy Real Estate in the GTA?
Thursday Oct 13th, 2022
There has been quite a stir lately when it comes to our economy, the real estate market, and just life in general.
Why? Let's see...
• Rising interest rates
• Declining property values
RECESSION? You betcha. BUT it’s important to note that there is a silver lining.
Let’s face it, cracks are forming in Canada’s economy. Housing markets have cooled sharply and The Bank of Canada is in the midst of one of the most aggressive rate-hiking cycles in history. Let's take a look at the impact of this on the GTA Real Estate Market...
Earlier this year it was nearly impossible for most people to secure a home in Toronto and neighbouring cities. Right now, buyers have a lot more power. Homes are sitting on the market for much longer and, in most neighbourhoods, sellers are willing to negotiate with open arms — something that was unimaginable just months ago.
Buyers, I can also sympathize with your hesitations. So, let’s address them.
Are you worried about the high interest on your mortgage? Remember, rent is 100% interest.
Are you worried about your property value going down? To be honest, in the short term it just might. However, if you are in it for the long-haul, you WILL see your investment GROW.
If you are unsure about investing during a recession, I urge you to remember that real estate, especially the Downtown Toronto market, is a stable long-term investment and has historically performed quite well. Real estate just so happens to outperform most other investment options, including the stock market. Take a look at this article on Investing in Real Estate vs. Stocks
If you have ONE takeaway from this post, let it be this: Do not try to time the market. By the time you wait for the rates come down, home prices will have risen again and buying a home might be out of reach. If you are a buyer, especially a first time home buyer, who has been waiting on the sidelines for the prices to “cool down” NOW is your perfect chance! If you have a stable job, a down payment saved up, and want a place to call YOUR home, take the plunge now!
Interest rates are high today, yes, but eventually they will come down. This is when your investment will sky-rocket. If you want a secure investment that will grow in the next 3-5 years, let's chat. Being well informed is everything in this game.
And remember, all good things require a leap of faith.