The downturn in the housing market might be slowly coming to a close, suggests a new report from the Royal Bank.
Prices in Cambridge, for example, are off 22%, while London and Brantford have seen an 18% decline. Kitchener-Waterloo, Kawartha Lakes and Hamilton/Burlington have all had a 17% drop in prices.
While Toronto’s decline has been 11%, prices are expected to fall further.
Toronto also saw a drop of almost half (49.3%) in numbers of home sales in October versus October 2021, while new listings were down 11.5%.
For those on the sidelines wondering when or if to buy, a Toronto mortgage expert (who prefers not to be named) has some words of wisdom.
For starters, he prefers to keep all the gloom and doom on the down-low. A correction notwithstanding, real estate remains a solid investment.
So on the plus side, “with the correction have come reduced prices and reduced closing costs, especially in the GTA,” the expert said.
That’s provided you don’t have a lot of other debt, obviously.
As for figuring out your monthly mortgage payments, calculate $6 per thousand; a $500,000 mortgage will cost $3,000 a month, for example.
The fact that a one-year mortgage is currently at the highest rate and the five-year rate is lower — an inverted yield curve — is a sign of uncertainty.
“For the first time in my career, I’m not telling people what to do. Instead, I’m telling them their options,” he said.
The consensus seems to be that the worst is behind us, “but we’re heading into stagnation. Things will level off, but we need stability.”
There’s very little on the market right now, but the expert’s expectation is that things will pick up after March break, when young families will start looking again in earnest.
“The banks aren’t taking any chances. Anyone who thinks the banks are just giving money away — no! It’s never been tougher to get credit.”
Last word: focus on your debt. “I used to say, ‘Continue to save.’
“Now I say, ‘move from investing to getting rid of debt.’”
