For a couple of years, Canada’s property market was on a steep upward spiral. House prices skyrocketed, until they had far surpassed pre-pandemic highs. Then interest rates started to rise, and buying a home became more expensive than ever.
However, the rise of interest rates meant that the high prices could not last for long. Since May, Canada’s realty market has been cooling quickly. While we have not seen a crash, prices are significantly down from their peaks.
With this in mind, you may be thinking about buying a home in the near future. Is this a good idea or should you wait for prices to drop even further? What about the expense of actually decorating your new home?
Are prices still going down?
Prices have not stopped declining since May. They have declined every month including October 2022. However, that does not mean there are no signs that the decline will end. On the contrary, the pace of the decline in October was the lowest since the downturn began.
There is never any surefire way to predict the housing market. Experts get it wrong fairly often. But indications do still mean something. The fact that the decline is slowing is a strong sign that we are reaching the end and that prices will start to rise again.
In light of this, you may think that now is the best time to buy a home, rather than waiting for prices to rise. But furniture prices will also play a part in your decision, as will the available mortgage rates.
Is furniture expensive?
Inflation has hit everyone pretty hard. Industries that rely on construction and manufacturing have had it harder than others. Supply chain delays, along with the cost of gas, have led to soaring expenses. As such, prices have been going up throughout 2022.
However, as we approach the end of the year, many companies have managed to turn this around and are offering lower prices to ease the stress on customers. Canadian furniture companies, such as Bouclair, are offering lower rates on items than have been available for a long time.
If you’re looking to furnish a new home, you won’t have to worry about high prices. In tandem, lower housing costs and the low price of furniture may have you considering buying a home. However, interest rates may make you think again.
How do interest rates impact the cost of housing?
Unless you’re buying a home in cash, your mortgage payments are going to be determined based on the mortgage rates you get. The higher the benchmark interest rates in the country, the higher the mortgage rates. At present, interest rates are particularly high as the country tries to deal with inflation.
This is a major reason for the prices of homes dropping. The simple reality is that it can be more expensive to buy a cheap home now than it was to buy a more expensive home a year ago.
Canada’s property prices are low, as is the cost of furnishing a home. But this doesn’t mean it’s a good time to buy a home. On the contrary, the price you pay will be significantly linked to the mortgage rates you secure.
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