This influx represents one of the highest rates per population of any country in the world.

These newcomers will be looking to navigate the dream of owning a home in Canada. According to REALTOR.ca insights, approximately 40% of individuals currently searching for homes are first-time buyers.

This article lays out the three significant steps to help you become prepared about the purchasing a home in 2024, including:

• Planning out your needs and what you can afford;
• Arranging your finances and mortgage; and
• Selecting a real estate agent

Plan the Requirements of Your First Home and What You Can Afford in 2024

What do you need in a first home?

Homes come in all shapes and sizes, in different neighbourhoods, and with various amenities. Before you even look at potential homes, you need to decide what’s important to you. This is especially true if you’re buying a home with a partner. It’s better to understand each other’s needs and wants now rather than later on in the process. For example, the neighbourhood and school district may be vital if you want or already have children and want to live in a neighbourhood with great schools.

What kind of first home can you reasonably afford?

You should also consider what you can afford when contemplating your needs and wants. You may want 3,000 square feet of space. But such a large home is out of reach for most first-time homebuyers. Areas with high-ranking school districts are also expensive.

Even if you can get an enormous mortgage to purchase the most expensive house available to you, it doesn’t mean you should. A sizeable monthly mortgage payment can hurt your financial and mental well-being in the long term. The Canada Mortgage and Housing Corporation recommends keeping your total housing payment (this includes taxes, maintenance, and mortgage) under 35% of your gross household income.

Arrange Your Finances and Mortgage for Your First Home

Are you financially ready to purchase your first home in 2024?

Buying your first home requires financial readiness. At this point, you’ve likely saved for a downpayment. But are you ready for closing costs such as legal fees and home inspection costs? These costs can amount to 2 – 4% of your purchase price. Further, once you purchase the home, are you ready for property taxes and maintenance expenses on top of your monthly mortgage payments?

It’s also important to understand what tools the Canadian government provides to first-time homebuyers. These tools generally make it easier for first-time homebuyers to make their purchase.

What is your credit score?

The next step is to review your credit score, which determines whether you’re qualified mortgage. It’s handy to find services that can help track your credit score. Many banks offer free credit score estimates without impacting it.

If your credit is on the low side, it’s essential to bring it up. This isn’t something you can do overnight. Raising your score may even delay your first home purchase. But a better credit score can provide you with better mortgage rates and more financial flexibility. If you’re purchasing your first home with a partner, note that lenders consider both of your scores.

How to find a mortgage for your first home

Your mortgage is commonly the largest loan you’ll take out in your lifetime. Therefore, it’s essential to shop for the best one. You’ll likely speak with two types of people in this process: a mortgage lender and/or a mortgage broker.

• Mortgage lenders are most commonly your large banks or credit unions. They lend money directly to you.
• Mortgage brokers don’t directly lend to you but arrange a transaction to help you find a lender. Brokers have access to many lenders beyond the big banks and credit unions — generally referred to as “A Lenders”. They can introduce you to B and C lenders who may be more lenient if you have a less-than-pristine credit score.

Previously this process involved visiting numerous banks and mortgage broker offices. But post COVID-19, this process is more commonly done over video conferencing. When the deal is settled, some lenders or brokers may still require you to visit in person to sign the paperwork.

The interest rate on your mortgage is the most crucial characteristic, but also consider aspects such as:

• Do I need to purchase mortgage insurance?
• What fees do I need to pay if I break the mortgage?
• Are there any penalties if I refinance my home?

Getting your mortgage pre-approved before you begin to look at properties is essential but optional. A pre-approved mortgage can provide certainty in how much you can bid on a house when you find the one.

Find a Real Estate Agent

Buying a home isn’t easy. It’s a lengthy process with complicated steps and procedures. Luckily, real estate agents are here to help. A realtor can match your needs and wants with what you can afford. They can also advise what to look out for in a first home — things you’ve never anticipated. They can address your concerns about the current market conditions, how certain neighbourhoods are, and what red flags to look out for and provide referrals to real estate lawyers, home inspectors, and other professionals part of the home buying process.

A REALTOR® can also do a lot of the in-person work for you during this COVID-era. Suppose you’re afraid of attending a home showing. In that case, many agents may be happy to visit the property on your behalf and show it to you via ZOOM, Facetime, or similar applications.

Once you’re ready to close on your deal, a real estate advisor can help prepare your offer package. This includes your offer price, pre-approval letter, proof of funds for the down payment, and terms and conditions.

It’s also important that you meet with several real estate agents before selecting the one you want to work with. Hiring an agent is similar to hiring an employee. You’ll want to meet with multiple agents and ask questions to understand their credentials. Online reviews are also a great way to differentiate between agents as reviews are written by real clients that have had a full experience working with the prospective agent you are interviewing.

Buying your first home is a complicated and exciting process — especially in 2024. It’s important to plan out what you can afford and what amenities and features that you and your partner need in a home. Arranging your finances and mortgage and finding an excellent real estate agent are also critical to making this process as smooth as possible and turning your homeownership dream into reality.

The post Three Steps to Purchasing Your First Home in 2024 first appeared on RankMyAgent - Trusted resource about Buying, Selling and Renting.

Now with COVID-19 keeping us in our homes, there’s a new exodus, of not only Canadians but people across the world, reconsidering whether living in the city is the right decision. A popular New York Times article noted that between March 15 and April 28 of this year, moves from New York to Connecticut increased 74% from a year ago. Further, moves from New York to New Jersey saw a 38% increase, and from New York to Long Island saw a 48% increase.

So, what is causing these moves to the suburbs? This article reviews how and why COVID-19 is causing more people to move out of the city core. The post also provides insight into the non-COVID-19-related trend towards moving from the city to the suburbs, especially with millennial homebuyers. Lastly, we note some things to consider before actually looking for a home in the suburbs.

How COVID-19 is Pushing People to Reconsider

Many city homeowners and renters have wanted to move to the suburbs for some time. COVID-19 may have pushed this idea forward. After several months of cooping inside the confines of a small apartment or home, many desire more space and greenery. A larger home is also becoming attractive as people work from home and dream of a home office beyond a nook in their kitchen. However, the only way to afford a larger home is to move to the suburbs, where sizable homes are more affordable.

COVID-19 has also instilled fear into people. There’s the fear of crowded parks when you walk your dog or the elevator buttons that you need to press on your way back home. Instead, a suburban home can provide a better ability to distance from neighbours. This is especially important as we don’t know when COVID-19 will end.

A significant downside to suburban living is the longer commute. Office buildings tend to concentrate in downtown cores. TD’s 2019 Spring Homebuying survey found that 45% of respondents found the ability to live close to work was a key purchasing factor. But COVID-19 has also changed how we work. Companies such as Shopify have permanently moved to a work-from-home model, and the demand to social distance has catapulted most organizations into a firmer acceptance of working from home. So, the need for someone to live close to their office is becoming less relevant, making homes in the suburb (with the opportunity to design your own home office) more appealing.

Millennials Making the Move to the Suburbs

TD’s homebuying survey also found that of the 8 out of 10 millennials who aspire to own a home, two-thirds were willing to forego living in the city to meet their home-ownership aspirations. For millennials homebuyers, affordability is on the top of their mind. They also care for the size of their home, the neighbourhood, and the amount of outdoor space. This is why a home in the suburbs may better attract millennials.

As a result of this trend towards suburban living, both city planners and large corporations are taking note. Developers are looking to create city centres that provide millennials with the same benefits as the downtown core, with high-end dining, nightlife, event venues, and more. Multinational corporations are also opening second offices in close-by suburbs in addition to an office in the downtown core. A suburb office can offer less pricey real estate to the company and more convenience to some employees. In Vaughan, Ontario, many of the big accounting firms such as PwC and KPMG have opened a second headquarters, just a 40-minute drive from their downtown office.

What to Consider Before Moving to the Suburbs

Moving from the city to the suburbs is no small task. There are several items to consider before making the move. This includes leaving friends and family and additional costs.

If you decide to move to the suburbs, remember that visiting a friend or family member who also lives in the city is no longer a short walk or subways ride away. The ability to socialize with others ultimately becomes harder, as most places in the suburbs require at least 10 minute or more of driving. This inability to socialize is why some believe suburbs make people miserable. Now, meeting with a friend may involve driving 40 minutes downtown, finding parking, and finally walking to your destination.

Although buying a home in the suburbs is cheaper than in the city, it comes with additional costs. A larger home means more maintenance costs. Suddenly, there’s a lawn to mow, a pool to drain, and snow to shovel. Utility costs also increase as you need heating and air conditioning for a larger space.

Suburbs are less densely packed, so you can’t assume that its transit system is just as fast and reliable as the city’s. So, moving out of the city may mean having to buy or lease a car… maybe even two cars. Oh yeah, and there are also car insurance and car maintenance costs that come with that. If you need to work at an office, it likely means a further commute, which also increases your day-to-day expenses.

Moving from the city to the suburbs can mean more space at a lower cost. Especially with COVID-19 forcing us to stay at home, many people are getting closer to making the move. Moving to the suburbs is also how many millennials are hoping to purchase a home, as city prices are unaffordable. Just remember that moving out of the city may mean leaving friends and family and new expenses.

The post Why Canadians are Moving from the City to the Suburbs first appeared on RankMyAgent - Trusted resource about Buying, Selling and Renting.

The residential real estate industry is not different from the rest of the corporate world. Homebuyers and sellers must communicate with agents through new means as opposed to face-to-face interactions. Further, home tours have turned virtual. These may become permanent fixtures even once the Coronavirus is no longer everyone’s first thought.

But it’s not only technology leaving a lasting impact on the real estate sector. Everyone has realized the importance of having living space — especially true as many of us must work and self-isolate at home. Homebuyers and sellers now have a more substantial interest in moving to the suburbs, where a larger home is still within their budget.

COVID-19 will have lasting impacts on the real estate market and the buying and sell process. This post discusses COVID-19’s potentially lasting effects on the operations of the real estate industry. This includes:

1. Buyers and sellers using social media to communicate with agents;
2. The increasing use of virtual home tours and remote home buying; and,
3. A greater demand for larger homes in the suburbs.

Meeting and Communicating with Agents via Social Media

How we find an agent to buy or sell our home has changed with technology. Speaking with friends and getting a referral to an agent is still common. But instead of a call, many opt to message an agent on social media.

A 2018 survey on realtors in the digital age found social media was the best source of generating high-quality leads among agents, even more so than Multiple Listing Service (MLS) websites. Now that it’s harder to meet with an agent face-to-face or through cocktail parties and other social gatherings, social media is even more critical for realtors.

The pandemic is likely pushing more real estate agents onto social media to replace the social gatherings where realtors once met new business leads. As more agents adopt this lead generation tactic, it’s likely to stay in their arsenal for the long term. And social media will become more prominent in how buyers/sellers communicate and meet realtors.

Virtual Home Tours and Remote Buying

We’ve used the internet to browse online home listings for the past two decades. There’s nothing new about it. But the ability to do so during COVID-19 has made it more important, and so, agents are putting more effort into their online listings.

Photography

We already understand that pre-COVID, homes that had high-quality photography sold faster. We can only imagine how much faster photos sell a home now that open houses and showings aren’t as frequent. Before we call an agent to book an in-person showing, we’re likely looking through the photos first to narrow down what properties we want to learn more about.

Videography

A real estate video can help a potential buyer feel like they’re walking through the home. Before COVID, 73% of homeowners said they’re more likely to list with an agent who uses video. Again, this number is likely even greater with COVID-19. As agents adopt more real estate videos into their marketing strategy, it may become a new norm for realtors after the pandemic.

Further, drone footage can provide potential buyers and sellers with an idea of how the surrounding community looks. People don’t only buy a home for the interior but also the neighbourhood.

3D Home Renderings

3D home renderings with technologies like Matterport are becoming more important. 3D digital home tours provide potential buyers with a better online experience that may stay in demand even when they can view an open house again.

Remote home buying

COVID-19 has shut borders, which means foreign home buyers likely can’t fly to Canada to view a property before purchase. Even purchasing a property in another province as a Canadian can be difficult.

As a result, remote home purchases have become more popular. 42% of Ontarians said they were “open” or “somewhat open” to purchasing a home they could only view digitally. Some brokerages combine digital 3D home tours with real-time calls with agents to provide an experience that replicates an in-person showing. Ultimately, COVID has made homebuyers more comfortable with remote home purchases, and this effect likely will last post-COVID-19.

A Push Towards Larger Homes in the Suburbs

Condo apartments [AZ1] in downtown city cores have become scary places for those avoiding COVID-19. Thousands of people living in the same building is not a good way to avoid the pandemic. When you combine this with the small spaces that condo owners must self-isolate in, many look to the suburbs as their next big move[AZ2] .

This desire to move to the suburbs isn’t temporary. Remote work has created a longing for home offices that aren’t possible in a condo. In a survey of Ontarian homebuyers, 28% mentioned that pandemic isolation had increased their desire for a bigger home, more space, and more amenities. 25% wanted more outdoor space, which is usually only possible in the suburbs (unless you can afford a high-end property in the city).

COVID-19 has changed society a lot. One of those changes is how we buy and sell a home, and some of these changes are here to stay. Even after the pandemic ends, we’ll likely see social media and online alternatives to home tours take an even larger role in selling homes and driving leads to agents. The demand for larger, suburban homes will also likely continue as we further embrace remote work.

The post How the COVID-19 Pandemic has Permanently Changed How We Buy and Sell Real Estate first appeared on RankMyAgent - Trusted resource about Buying, Selling and Renting.

Keeping safe from Coronavirus is difficult for the over 1.9 million Canadians living in condos. One condo building in Calgary has seen the worst of this, as they reported 32 cases of Coronavirus in June. In this article, we provide tips on how to minimize your chances of contracting COVID-19 if you live in a condo building. We explain what condominiums are doing, or should be doing, to prevent a full-building infection and review what you can do as a tenant to avoid being infected.

What Condominiums Are or Should Be Doing

Your condominium building has a responsibility to prevent the building from a COVID-19 outbreak. Most condo corporations have done their part through additional cleanings, closing off certain areas, and communicating reminders and information to tenants.

Additional Cleaning and Sanitation

Like restaurants, malls, busses, and more, condo buildings must sanitize regularly used areas more often to prevent a Coronavirus outbreak. This is especially true for objects such as door handles, stairwell railings, elevator buttons, and more. Additionally, the cleaning supplies that your building uses should no longer depend on scent and cost, but its ability to kill bacteria.

It’s also essential that your building provides its residents with easy access to sanitation, such as hand sanitizer. We may lose track of what we touch and end up with germs on our hands. But if your building has hand sanitizer stations at key areas, it’s a reminder to sanitize our hands.

Closing Off and Restricting Common Areas

Condo residents spend a lot on their condo fees. These fees usually go to amenities such as the pool, gym, and concierge. Although there’s a particular entitlement to these amenities because of condo fees, your condo should stop access to pools, gyms, and other non-essential facilities. These areas are prime for COVID-19 spread. As infection rates slow down, your building may reopen these amenities, but they should do so carefully. One common trend with gyms reopening is for members to book time slots so that the space is not overcrowded. Each time slot should also have space in between for sanitation. Condo buildings should look to do the same with building amenities.

Although the management office was once a place to socialize with your building’s staff or ask questions and file complaints, your condo should restrict access to these areas. You and other tenants can still ask questions or file complaints via phone or email, where the risk of Coronavirus transmission is nil.

Communication with Tenants

Your condo building should communicate with its tenants on multiple fronts. First, although we’ve been told again and again to wash our hands, social distance, and wear masks, it won’t hurt for signs in your condo building to do it again. Everyone forgets, and a reminder is better than a case of COVID-19. If your building isn’t already doing this, it’s an easy suggestion for your condo management.

Your building should also inform everyone about the initiatives they’re taking to prevent the spread of Coronavirus and if there are any possible cases in the building. This information should be available through emails, if your building has your email, or through signs in the elevators or main areas. It’s imperative to know if someone in your building may have COVID-19 so that you can self-isolate.

Personal Safety Precautions

You’re ultimately responsible for yourself in avoiding COVID-19. While going through your building, whether it’s to leave or to come home, it’s important to sanitize your hand and wear a mask. Elevator etiquette has changed in the COVID-19 era, and it’s important to understand what new etiquette entails. 

Personal Sanitation and Wearing a Mask

Standard COVID-19 measures should apply in your condo building, even if it’s your “home”. This means you should avoid touching anything and everything. To open a door or press a button, carry a napkin so you don’t have to touch the object. Your shirt sleeve or elbow will work too – as long as you’re using something that doesn’t make contact with your face. Furthermore, though, ideally, your condo building has hand sanitizer stations around key areas, it’s always better to carry your own bottle.

When you’re in the lobby or a common area of the condo building, make sure to wear a mask. Some cities are even taking steps to mandate mask-wearing in condo buildings. Your mask shouldn’t come off until you’re in the comfort of your condo unit.

Elevator Etiquette

Elevators have been a key concern in the COVID-19 era. Elevators don’t allow for social distancing due to being confined in a small box with multiple people. Others may have also contaminated the area by touching buttons or holding onto railings.

Again, it’s important to avoid touching buttons with your hands. Your hands may touch your face or rub your eyes, which can allow the virus into your body. If you see a crowded elevator that won’t allow for social distancing, it’s better to take the next one or the stairs

Although you’re used to your whole condo building being your home, be cautious during this time. Learn about your condo building’s initiatives to protect its residents by emailing or calling management. For yourself, assume that everything outside of your condo unit is infected with Coronavirus so that you’ll take the necessary precautions.

The post How to Protect Yourself from COVID-19 if You Live in a Condominium first appeared on RankMyAgent - Trusted resource about Buying, Selling and Renting.

In this article, we discuss the myth behind a COVID-19 recession resulting in the 2008-level real estate prices. We also provide some reason why now continues to be a good time to invest in real estate. Lastly, this article reflects on somethings to keep in mind for purchasing your first (or second or third) investment property. 

The Myth that Any Recession can Burst the Real Estate Bubble 

It’s often conventional wisdom that housing prices will decline during a recession, but this isn’t the always case. The 2008 financial crisis originated from subprime mortgages and the U.S. property market, among other factors, caused the decline in housing prices and subsequently the greater financial disaster. 

Subprime mortgages are not the reason for the possible recession that Canada could face. Now, the cause is the COVID-19, so it’s not likely that real estate prices will be affected as much as they were in 2008. Many experts across Canada believe that real estate prices may decline 5-10% at most due to COVID-19. Even though, until now, this hasn’t affected the market: monthly numbers from real estate boards across the country have continued to show a steady average price of the homes sold. 

COVID-19 is leaving many unemployed, reducing immigration to Canada, and providing us with economic uncertainty. However, the pressure exerted on the housing market by these factors is limited. Other COVID-19-related events, such as the slowdown of new housing constructions, are exerting upward pressure on real estate prices due to reduced supply. Further, if Canada can reopen its economy successfully and safely, the recession could have a smaller impact. 

Why You Should Consider Investing in Real Estate Anyways

The stock market’s prices have been jumping up and down due to on-going news about the Coronavirus. If you’re looking for a bit more stability in these unprecedented times, then residential real estate may be a good bet. 

As an income stream, real estate is relatively secure during a recession. Tenants will generally continue paying rent as they still have a legal obligation to do it. In contrast, a company whose stock you purchased may cut their dividends or the stock may see a sharp decline in value. 

Interest rates in Canada are still low, as the Bank of Canada attempts to stimulate the economy. This may reduce your cost of borrowing to purchase a home. If you can lock in a good mortgage rate for an investment property at this time, it’ll result in a better return on investment and cash flow down the road. 

A Few Best Practices for First-Time Real Estate Investors 

Just because now is a good time to invest, doesn’t mean you should jump right into any property you can get your hands on. If you purchase an overpriced property when you aren’t doing well financially, it could hurt you more than it could help you. 

Calculate your Cash Flow

In the world of real estate investing, cash flow is king. Cash flow is what you’re spending (cost of monthly mortgage payments and repaying other debts associated with the investment property) versus what you’re taking in (usually rental income). If you have a positive cash flow, you’re on a good track. Before buying an investment property, it’s important to run the numbers…. And, then, run them again to make sure you didn’t miss anything. When calculating your cash flow, make sure to ask yourself these questions:

● How much will your monthly mortgage payments be? 

● How much will renovations cost? 

● How much can you rent out the property for? 

● What happens if you can’t find a tenant to pay the price you’re looking for? 

Assess your Financial Position

It would be best if you also looked at your financial circumstance. Just because you have a good job today, doesn’t mean you’ll have one tomorrow. Especially not in the era of COVID-19. Would this investment still make sense if you were laid off or furloughed? Similarly, if you’re a business owner, could you manage the investment property’s mortgage if we face a second lockdown? Although residential real estate tends to be a safe investment, it’s essential to judge your financial position before committing to a purchase. 

High-Quality Properties in a High-Quality City

Finding the property with the lowest per-square-foot cost is usually not the best way to go. To find an investment property that will provide consistency in economic uncertainty requires buying in a high-demand area, even if it’s more expensive. This can better guarantee renter demand. 

Further, fixer-uppers are often of great value. You can renovate the property and get an even larger return on investment, however, there are some fixer-uppers you want to avoid. Properties with water damage or structural problems are often ones to avoid, especially as a first-time real estate investor. Even some veteran real estate investors stay away from these properties. 

We’re unsure if COVID-19 will bring a full-blown recession that’s as devastating as the one in 2008. However, it’s highly unlikely we’ll see the same kind of decline in home prices. Nevertheless, it may still be a good time to invest in residential property. Investment properties can provide a consistent income in times of uncertainty. But if you are a first-time investor, make sure you figure out your cash flow, assess your financial situation, and choose a high-quality property before making such a financial commitment.  

The post Tips to First-Time Real Estate Investors Navigating an Economic Recession first appeared on RankMyAgent - Trusted resource about Buying, Selling and Renting.

Of course, the best-case scenario is to wait out the storm and to move once we return to normalcy. However, this isn’t always possible. Maybe a deal is too good to pass up on. Perhaps you need to relocate due to a purchase-and-sales agreement. Or perhaps it’s for work. Whatever the case, it’s evident that moving from an old home to a new one during the Coronavirus era is not a choice for some people. At the same time, there is a way to make the move safely. In this article, we look at what moving companies and truck rental services are doing to help you during this time. We also provide some tips to reduce the chance of contracting COVID-19 in the process of your move. 

How Moving Services and Rental Businesses are Ensuring Your Safety

Moving Services

If you’re hiring a moving company for your journey, it’s still possible. Most provinces have deemed moving companies an essential service. Further, as the number of new cases comes down, we’re starting to see a lot of businesses open again. With that said, moving companies are not just going on business as usual. 

One of the most significant changes is a move from in-person tours to virtual tours for pricing estimates. In a usual moving scenario, the movers would come to your home and take note of all the furniture and fixtures that they need to move to your new home. This provides the proper information to know what size truck to bring in, how many movers they’ll need, and what you can expect as a cost. But due to minimizing physical interaction in a COVID-19 world, mover now asks you to aid them in a virtual tour of your home as an alternative way to make their pricing estimate. 

Movers are also taking precautions during the actual move. However, they are limited in what protections they can use. While it’s ideal that movers wear masks and gloves, this protective equipment can interfere with their work. Gloves can ultimately reduce a mover’s grip and increase the chances that they drop something. This can not only damage your item but also injure the movers. Masks can also reduce the mover’s ability to breathe. And when they’re moving heavy furniture, a good airway is critical to safely maintain enough strength to hold heavy fixtures. 

Movers are requesting that you leave a washbasin open to them. As we know, washing our hands is more important now than ever before. Informing movers which sink is available to them and leaving some soap and hand sanitizer can help protect the movers, your family, and others. 

To prevent spread among different movers, companies are staggering when their employees come into your old and new home to reduce the amount of contact. Moving companies may also limit each truck to two people. 

Truck and Container Rentals

Opting to move without a moving company can be a safer option because it involves fewer people you don’t know. However, you’ll likely still need to rent a truck or container. Companies such as U-Haul are taking strict measures to sanitize their vehicles. They disinfect everything from steering wheels, seats, and seat belts. Additionally, many have implemented six-feet distancing guidelines when individuals come to their stores. Online check-ins for some companies are also available to further reduce contact with any truck rental company staff. 

What You Can Do to Ensure a Safer Move During COVID-19

As mentioned before, if you’re using a moving service, one of the best things you can do is provide the movers with a washbasin and soap. But there are additional steps you can take to secure yourself and your family further:

• If you want to monitor your home as movers come in and out, limit it to yourself or to one family member. Ultimately, limit the number of people present. 
• If your movers are comfortable using protective equipment on the job, a poncho is an additional step to ensure that there’s even less contact between them and your items/home.
• Pack whatever you can yourself. This can limit how many people touch your possessions. 
• Ask your moving company what health measures they have in place. Ensure that they’re sanitizing their trucks and equipment and staggering their staff as they enter and exit your home. 
• Disinfect any hard surfaces. 
• Provide movers with precise instructions on the layout of furniture in the new house. This can prevent the amount of time they need to spend at the property. 
• Prepare separate bags with clothes that you can use for the first week at the new property. This can help prevent the need to open your other clothing boxes. 

Additionally, it’s common that you’ll want to declutter the number of possessions you have during a move. Although it’s commonly a great time to bring some no longer used items to a donation bin, the Coronavirus pandemic has resulted in the closure of donation bins. Friends and family may also be wary of accepting any second-hand items as a precaution. Therefore, many of your no longer used possessions may end up in a recycling bin or landfill. Although this is unfortunate, it’s part of limiting the spread of COVID-19. 

There’s no doubt we’ve entered a new normal. In an ideal world, try your best to delay moving until the situation gets better. But for some, there’s no choice but to move to a new location. If you’re in that situation, know that moving companies and rental businesses are taking measures to make your move as safe as possible. Additionally, your own precautions, such as preparing clothing and home layouts, can help reduce the chance of COVID-19 spreading. 

The post What You Should Know If You’re Moving During COVID-19 first appeared on RankMyAgent - Trusted resource about Buying, Selling and Renting.

So, is the real estate bubble finally popping? Well… not necessarily. There may be headlines claiming a real estate armageddon, but everyone has their own thesis. In this article, we reflect on what some of the top experts forecast for the future of the Canadian real estate market. We also review the factors steering us away from the idea that the real estate market is about to burst.

What is Everyone Saying About the Future of Canadian Real Estate?

There has been no shortage of predictions and research reports on what to expect in the near- and long-term of Canada’s residential real estate market. The CEO of Canada Mortgage and Housing Corporation (CMHC) provided a gloomy outlook on what’s to come. In a testimony to the House of Commons, he predicted that home prices could fall between 9-18% over the next year. One of the major fears that Siddall had was a “debt deferral cliff”, where mortgage deferral programs would come to an end and Canadians would need to start making payments again — whether they have the income to or not.

Not all experts agreed with Siddall. RBC forecasted that housing prices may decline 5% compared to last year; CIBC forecasted a 5-10% decline; and Moody’s, a financial services and research firm, estimated an 8% decline in Canadian real estate prices. And, in a surprising turn, TD predicted that home prices may increase by as much as 13.8% in some provinces by the end of 2020. While a 5-10% decline in housing prices is still significant, it’s nowhere near the possible 18% that Siddal had in mind.

Currently, CREA and other real estate boards have not reported significant declines in real estate prices, despite sales activity plummeting across the country. Not only has the pandemic resulted in fewer Canadians looking to purchase a property, but it has also delayed those looking to sell. Once restrictions of social gatherings and the threat of Coronavirus lifts, we may see momentum return to the real estate market on both the buyer and seller side.

Why We Likely Won’t See the Real Estate Bubble Pop

There are plenty of uncertain factors. For example, we don’t know how long social distancing measures will last in each province. We’re also unsure of how long it’ll take before we find a vaccine for Coronavirus. The longer social distancing is required and the longer a vaccine takes, the more negative effects we’ll see in the real estate market.

However, many factors point towards a healthy market once the COVID-19-era passes. This includes pent-up demand and supply, low-interest rates, and delayed housing inventory.

Pent-Up Demand and Supply

Many individuals hoping to buy or sell their home are waiting until Coronavirus ends. With the pandemic in place, it’s much harder to go through the whole process of hosting open houses and finding a home/buyer. This is one of the reasons why the price of residential units sold did not drop significantly or at all — because supply and demand for real estate declined in equal parts. As a result, it’s reasonable that sales activity will skyrocket once social distancing measures loosen up.

Further, the high cost of properties in cities such as Toronto and Vancouver is the result of a limited housing supply and high demand. The COVID-19 situation is neither reducing the demand nor increasing the supply — the ingredients required to pop the bubble. Instead, COVID-19 is reducing both demand and supply.

Low-Interest Rates Mean More Demand

When interest rates are low, demand for property goes up as it’s now cheaper to borrow money and purchase a property. Due to the Coronavirus pandemic, the Bank of Canada in March cut interest rates significantly and is currently holding it at 0.25%. This results in less costly mortgages (for the most part). Although we continue to see more uncertainty, these low-interest rates could drive even more demand in a post-COVID-19 world, meaning prices will only go higher if supply remains the same.

COVID-19 Has Also Stalled the Supply of New Homes

The construction of new homes is one way that the market can increase its supply of residential homes.  Although most construction is still permitted, the requirement for construction workers to socially distance themselves onsite has ultimately reduced productivity. In the prior mentioned report from CIBC, it estimates that social distancing regulations and the lag in overseas shipments have reduced construction productivity by 40%. This will ultimately result in a reduced supply of new housing.

What Factors Could Lead to Weaker Real Estate Prices?

Coronavirus has also birthed factors that could reduce demand to the point that prices may fall in the future. Due to the mass unemployment and rustles in the stock market, Canadians might prefer to delay their purchase of significant investments such as a home. Further, buyers who think that real estate prices will crash could be holding off until prices come down. Both of these factors could result in less demand. Although the unemployment numbers may point to a weaker economy, many of these jobs are layoffs. Companies that did lay off employees will likely rehire them once society recovers from the pandemic.

Many of the large Canadian banks predict that real estate prices will decline a few percentage points. This decline is possibly a market correction but not the bursting of a real estate bubble. Pent up demand, low-interest rates, and delayed new constructions could even result in higher real estate prices — not lower. There’s likely still time before a Coronavirus vaccine is found, but when it is, both buyers and sellers will be back in action!

The post What the Canadian Real Estate Market Could Look Like After COVID-19 first appeared on RankMyAgent - Trusted resource about Buying, Selling and Renting.

Although it’s a tough time, it’s important to remain hopeful. The federal and provincial governments have worked with the private sector and with other organizations to help those in financial distress due to COVID-19. Some of these measures may have an impact on your home purchase or sale.

In this article, we look at what measures and policies have been put in place to help fight or recover from COVID-19. Particularly the ones that affect the home purchase and sale process. This includes the restrictions and bans on open houses, the ability for homeowners to defer mortgage payments, and interest rate cuts by the Bank of Canada.

The Ban on Open Houses

Open houses are an easy way for COVID-19 to spread. A dozen people wandering inside a 3,000 square foot or smaller home is the ideal environment for transmission. That’s why real estate boards in Canada have called for the end of open houses ever since measures were put in place to prevent the spread of COVID-19. As a substitute, agents have gotten creative with technology and held open houses through online live streams or pre-made video tours.

Most realtors now will not conduct an open house for the sake of safety and the law. This is not only due to the strong urges from realtor boards, but provinces like Ontario have prevented gatherings of more than 5 people, which can make the idea of an open house more or less impossible. Instead of urging its realtors to not conduct open houses, some boards like the Alberta Real Estate Association (AREA) have outright banned open houses.

If you’re currently looking to purchase a property, you’ll likely have to make do with virtual home showings. If you’re very serious about a property, it may just be a reason for a realtor to provide an in-person showing.

As a seller, you need to understand that realtors are now more limited than before. Without the opportunity to hold open houses, your agent has lost a tool in their belt, but that doesn’t mean that they won’t continue to do the best that they can.

The Ability to Defer Your Mortgage Payments up to Six Months

When a bank provides a mortgage, the debt doesn’t stay with the bank for long. They commonly pool together these mortgages and sell it to someone else, taking a cut on the way. What they sell is called a mortgage pool. If banks want to keep providing mortgages, there needs to be demand for these mortgage pools. To help provide this liquidity, the Government of Canada committed to the Insured Mortgage Purchase Program (IMPP). In this, they’re prepared to purchase $150 billion of insured mortgage pools. This is to ensure lending continues in this dire time.

As a result of the IMPP, the government has also ensured agreement with the leading six Canadian banks that they would allow for up to six months of mortgage payment deferrals. This will ultimately vary on a case-by-case basis. Banks are also set to provide relief on other credit products such as credit cards.

The ability to defer mortgage payments will provide Canadians with some much-needed financial flexibility. If you’ve lost your jobs or lost other sources of income, it can help to defer payments till later on so that you can use your money on necessities like food.

However, this deferral will not be interest-free in most cases. So, if you do decide to defer your payments, you’ll end up having to pay more money back to the bank.

This deferral also helps those who are renting. Landlords who can defer their mortgage payments may be more lenient in deferring or reducing rent.

Estimates believe that these deferrals will leave homeowners with roughly $663 million in their pockets per month. This is based on monthly Canadian mortgage payments averaging to $1,326.  However, everyone is now rushing to their bank to defer their next mortgage payment—whether they need to or not—and therefore, it may take some time to get through.

This opportunity to defer your mortgage can be useful if you’re selling your property due to a loss of income, since this may mean you need extra capital. Delaying your next mortgage payments can hopefully put some money back in your pocket until the economy returns to normal.

Interest Rate Cuts by the Bank of Canada

The Bank of Canada announced three cuts to interest rates in March. This effectively brought the rate to 0.25% and has brought prime interest rates to 2.45%. In a statement, the Bank said that these rate cuts would cushion the economic impacts of COVID-19 by easing the cost of borrowing.

At first, this brought down the cost of borrowing money, meaning lower mortgage rates. That’s why in the first weeks of the rate cuts, there was an unprecedented rise in mortgage refinances. And although day-to-day Canadians will have an opportunity to borrow at lower rates, the rate cut by the Bank of Canada does not equally reduce the cost of borrowing at your local bank. Instead of passing on the complete interest reduction to the consumer, many banks are increasing their margins. This is because lenders are seeing more risk in the borrower’s market. As more individuals lose their jobs, the risk of them defaulting on their loan goes up. These higher margins are to take this into account.

Overall, it may still be cheaper to obtain a mortgage now than before. But with such a high demand for mortgages at current interest rates, banks may further fatten their margins. Although the era of COVID-19 may decrease the number of transactions going on in Canadian markets, we can hope that lower interest rates can improve that situation.

The coronavirus has resulted in new policies and changes such as a ban of open houses, the ability to defer your mortgage payments, and lower interest rates. These changes will likely help or hinder your home buying process. However, it’s important to remain hopeful that we’ll get through this storm.

The post The COVID-19-Related Policies and Measures That a Home Buyer or Seller Needs to Know first appeared on RankMyAgent - Trusted resource about Buying, Selling and Renting.