Is now a good time to buy a home or should I wait until 2020? I heard this question several times this week from local area residents who are renting and potentially thinking of buying in the near future. I will try to give an unbiased answer to the question.
Real Estate is a tough market to time. Pricing in the real estate market is based on a lot of factors like; supply and demand, local employment statistics, interest rate trends, health of the economy, other things like first time buyer incentives or the latest government policy to control the market.
In Halton and the surrounding GTA and Golden Horseshoe the vacant supply of land is slowly dwindling. Oakville has development lands north of Dundas highway and the supply is estimated to last in the 10 to 15 year range before it runs out. Burlington will run out of development lands for residential housing faster than that.
On the demand side, the population keeps on growing. Buyers like communities like Oakville and Burlington because of their livability and proximity to good paying jobs, good schools, shopping, trails and highway and train access.
Interest rates are holding. The Bank of Canada reported in August the Prime Rate was 3.95% and mortgage rates for 1 year: 3.64%, 3 year 3.94%, 5 year 5.19%.
The national unemployment rate in August was 5.7% according to Statistics Canada. Second Quarter Growth was at 3.7%.
Here is the latest 10 year average price chart in Oakville.
So based on all of these factors I would say it is an excellent time to buy now and in 2020. There will be increases in prices by next spring so why wait until then to purchase? I would recommend getting into the market. It is a great long term investment.
The alternative to owning a home is renting. The Rental Market is also very hot in the GTA and surrounding areas. One bedroom condos were leased for $2192 in Q2 of 2019 and that is up 6.7% from $2055 in Q2 of 2018. Two bedroom condos were leased for $2873 in Q2 of 2019 and that is up 4.3% from $2755 in Q2 of 2018.
Three bedroom Townhouses were leased for $2778 in Q2 of 2019 and that is up 13.1% from $2455 in Q2 of 2018 according to TREB's Rental Market Report for August 2019.
The Vacancy rate in Toronto was 0.7% and 0.6% in Halton in Q2 of 2019, according to the CMHC rental market report.
When to buy a home depends on the needs of the potential Buyer. Buyers should be aware of the factors that affect pricing in the Real Estate market and realize that it is a tough market to time. Buying a home in a market that has good fundamentals will prove to be a good long term investment.
If you have any questions about the Real Estate market please contact me I would be glad to discuss your needs and go over a strategy tailored to your wants and needs.
Posted by Bill Keay on September 24, 2019.