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In January of this year, the Federal Reserve announced a plan to adjust its monetary policies to meet the challenge of rapidly growing inflation. As many experts and economists believe it is the greatest threat to economic recovery, that plan includes raising interest rates three times over the course of the year. Rates have remained at rock-bottom levels to meet pandemic challenges, but a quick reopening has sparked a rise in inflation that banks are eager to get under control to bring the economy back to some level of normality.
But what does this mean for the real estate market? And more specifically, what are some of the steps a current or prospective property owner can take to navigate the volatility that remains, despite the downturn in Omicron variant cases throughout Los Angeles?
Make no mistake, Covid-19 is still very much a part of our lives and may well continue to be for the foreseeable future. But now we must learn to adapt and adjust to new real estate market realities and make the right moves when it matters most. Here are some actions to consider:
Refinance your mortgage
For much of last year, mortgages were available at interest rates hovering around 3%, but predictions for 2022 have that rate increasing by as much as one point. What kind of impact would a 4% rate have on your home loan? Even such a seemingly small increase could mean a significantly larger monthly payment.
Consider how such a fluctuation could affect a 30-year loan on a $400,000 home. Raising the rate from 3% to 4% represents an extra $223 in monthly payments, so now might be a good time to put some thought into locking in a fixed-rate mortgage to reduce these costly hikes and combat the unpredictability of increasing rates, particularly if your mortgage has a variable or adjustable rate that’s stretching your dollar thin already. Be sure to perform any due diligence ahead of a refinancing effort, of course, or when shopping around for a home equity line of credit (perhaps a change from a variable to a fixed-rate alternative).
Despite the many hardships that were part and parcel of the pandemic, having a roof over one’s head remained a priority for us all. A number of state and federal mandates put into place in response focused on keeping renters in their homes, even if they were unable to pay rent. When these mandates were lifted or reduced, demand for available rental options remained higher than ever on single- and multi-family properties (which were among the most in-demand during the height of the pandemic), even with a significant increase in vacancies in many markets.
Multi-family properties featured more competitive rent prices than single family properties, but both represented investment opportunities with dependable revenue streams. Some landlords might opt to make their properties more enticing to renters by including utilities and parking in the cost of rent. When a severe economic downturn hits, these are the properties that become more attractive to renters, who often need to make difficult decisions in their monthly budgetary plans.
Consistently high demand translates to increased value, which means more consistent income and a greater return on investment in the long run. The fact remains that regardless of the health of our national economy, this type of real estate continues to build wealth.
So is now the time to buy? Absolutely. With mortgage rates still low, you can expect to enjoy considerable savings on your borrowing costs, and if the Fed is indeed planning on raising rates in 2022, it’s best to strike while a palpable ambiguity remains in the economic outlook.
Higher rates are always a detriment to real estate investments, and the Fed making waves about increases this year is sure to make investors nervous. Inflation is the culprit for this change in policy, but I wonder if they aren’t conflating inflation with the current ongoing supply chain issues that are being experienced in just about all sectors of commerce.
Those delays are being felt in the construction industry throughout the state of California (among others). Many essential building materials are sourced from Asia, and disruption in that supply chain is wreaking havoc on construction rates. Materials are getting harder to procure and the result is higher cost of goods and limited availability. This slows the pace of construction and increases costs related to the development of new residential properties.
Inventory of completed properties has decreased dramatically, due to both lower rates and that fewer are being built as a result of supply hiccups. That, combined with a growing scarcity of available properties for sale, could drive up prices in the state, a situation that may continue if present trends endure. If the Fed ultimately decides not to implement three rate hikes this year, real estate demand will likely remain strong throughout 2022.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
MONTREAL – The Quebec Professional Association of Real Estate Brokers says Montreal-area home sales rose 9.3 per cent in August compared with the same month last year, with levels slightly higher than the historical average for this time of year.
The association says home sales in the region totalled 2,991 for the month, up from 2,737 in August 2023.
The median price for all housing types was up year-over-year, led by a six per cent increase for the price of a plex at $763,000 last month.
The median price for a single-family home rose 5.2 per cent to $590,000 and the median price for a condominium rose 4.4 per cent to $407,100.
QPAREB market analysis director Charles Brant says the strength of the Montreal resale market contrasts with declines in many other Canadian cities struggling with higher levels of household debt, lower savings and diminishing purchasing power.
Active listings for August jumped 18 per cent compared with a year earlier to 17,200, while new listings rose 1.7 per cent to 4,840.
This report by The Canadian Press was first published Sept. 6, 2024.
In the quest to find cities where renters can enjoy the best of all worlds, a recent study analyzed 24 metrics across three key categories—Housing & Economy, Quality of Life, and Community. The study ranked the 100 largest cities in Canada to determine which ones offer the most to their renters.
Here are the top 10 cities that emerged as the best for renters in 2024:
St. John’s, NL
St. John’s, Newfoundland and Labrador, stand out as the top city for renters in Canada for 2024. Known for its vibrant cultural scene, stunning natural beauty, and welcoming community, St. John’s offers an exceptional quality of life. The city boasts affordable housing, a robust economy, and low unemployment rates, making it an attractive option for those seeking a balanced and enriching living experience. Its rich history, picturesque harbour, and dynamic arts scene further enhance its appeal, ensuring that renters can enjoy both comfort and excitement in this charming coastal city.
Sherbrooke, QC
Sherbrooke, Quebec, emerges as a leading city for renters in Canada for 2024, offering a blend of affordability and quality of life. Nestled in the heart of the Eastern Townships, Sherbrooke is known for its picturesque landscapes, vibrant cultural scene, and strong community spirit. The city provides affordable rental options, low living costs, and a thriving local economy, making it an ideal destination for those seeking both comfort and economic stability. With its rich history, numerous parks, and dynamic arts and education sectors, Sherbrooke presents an inviting environment for renters looking for a well-rounded lifestyle.
Québec City, QC
Québec City, the capital of Quebec, stands out as a premier destination for renters in Canada for 2024. Known for its rich history, stunning architecture, and vibrant cultural heritage, this city offers an exceptional quality of life. Renters benefit from affordable housing, excellent public services, and a robust economy. The city’s charming streets, historic sites, and diverse culinary scene provide a unique living experience. With top-notch education institutions, numerous parks, and a strong sense of community, Québec City is an ideal choice for those seeking a dynamic and fulfilling lifestyle.
Trois-Rivières, QC
Trois-Rivières, nestled between Montreal and Quebec City, emerges as a top choice for renters in Canada. This historic city, known for its picturesque riverside views and rich cultural scene, offers an appealing blend of affordability and quality of life. Renters in Trois-Rivières enjoy reasonable housing costs, a low unemployment rate, and a vibrant community atmosphere. The city’s well-preserved historic sites, bustling arts community, and excellent educational institutions make it an attractive destination for those seeking a balanced and enriching lifestyle.
Saguenay, QC
Saguenay, located in the stunning Saguenay–Lac-Saint-Jean region of Quebec, is a prime destination for renters seeking affordable living amidst breathtaking natural beauty. Known for its picturesque fjords and vibrant cultural scene, Saguenay offers residents a high quality of life with lower housing costs compared to major urban centers. The city boasts a strong sense of community, excellent recreational opportunities, and a growing economy. For those looking to combine affordability with a rich cultural and natural environment, Saguenay stands out as an ideal choice.
Granby, QC
Granby, nestled in the heart of Quebec’s Eastern Townships, offers renters a delightful blend of small-town charm and ample opportunities. Known for its beautiful parks, vibrant cultural scene, and family-friendly environment, Granby provides an exceptional quality of life. The city’s affordable housing market and strong sense of community make it an attractive option for those seeking a peaceful yet dynamic place to live. With its renowned zoo, bustling downtown, and numerous outdoor activities, Granby is a hidden gem that caters to a diverse range of lifestyles.
Fredericton, NB
Fredericton, the capital city of New Brunswick, offers renters a harmonious blend of historical charm and modern amenities. Known for its vibrant arts scene, beautiful riverfront, and welcoming community, Fredericton provides an excellent quality of life. The city boasts affordable housing options, scenic parks, and a strong educational presence with institutions like the University of New Brunswick. Its rich cultural heritage, coupled with a thriving local economy, makes Fredericton an attractive destination for those seeking a balanced and fulfilling lifestyle.
Saint John, NB
Saint John, New Brunswick’s largest city, is a coastal gem known for its stunning waterfront and rich heritage. Nestled on the Bay of Fundy, it offers renters an affordable cost of living with a unique blend of historic architecture and modern conveniences. The city’s vibrant uptown area is bustling with shops, restaurants, and cultural attractions, while its scenic parks and outdoor spaces provide ample opportunities for recreation. Saint John’s strong sense of community and economic growth make it an inviting place for those looking to enjoy both urban and natural beauty.
Saint-Hyacinthe, QC
Saint-Hyacinthe, located in the Montérégie region of Quebec, is a vibrant city known for its strong agricultural roots and innovative spirit. Often referred to as the “Agricultural Technopolis,” it is home to numerous research centers and educational institutions. Renters in Saint-Hyacinthe benefit from a high quality of life with access to excellent local amenities, including parks, cultural events, and a thriving local food scene. The city’s affordable housing and close-knit community atmosphere make it an attractive option for those seeking a balanced and enriching lifestyle.
Lévis, QC
Lévis, located on the southern shore of the St. Lawrence River across from Quebec City, offers a unique blend of historical charm and modern conveniences. Known for its picturesque views and well-preserved heritage sites, Lévis is a city where history meets contemporary living. Residents enjoy a high quality of life with excellent public services, green spaces, and cultural activities. The city’s affordable housing options and strong sense of community make it a desirable place for renters looking for both tranquility and easy access to urban amenities.
This category looked at factors such as average rent, housing costs, rental availability, and unemployment rates. Québec stood out with 10 cities ranking at the top, demonstrating strong economic stability and affordable housing options, which are critical for renters looking for cost-effective living conditions.
Québec again led the pack in this category, with five cities in the top 10. Ontario followed closely with three cities. British Columbia excelled in walkability, with four cities achieving the highest walk scores, while Caledon topped the list for its extensive green spaces. These factors contribute significantly to the overall quality of life, making these cities attractive for renters.
Victoria, BC, emerged as the leader in this category due to its rich array of restaurants, museums, and educational institutions, offering a vibrant community life. St. John’s, NL, and Vancouver, BC, also ranked highly. Québec City, QC, and Lévis, QC, scored the highest in life satisfaction, reflecting a strong sense of community and well-being. Additionally, Saskatoon, SK, and Oshawa, ON, were noted for having residents with lower stress levels.
For a comprehensive view of the rankings and detailed interactive visuals, you can visit the full study by Point2Homes.
While no city can provide a perfect living experience for every renter, the cities highlighted in this study come remarkably close by excelling in key areas such as housing affordability, quality of life, and community engagement. These findings offer valuable insights for renters seeking the best places to live in Canada in 2024.
