It’s no secret that as we start off 2022 the housing market continues to roar with prices climbing higher and higher every month, however if you’re like regular Canadians you’re probably asking yourself, when will this ever end?
Recently, I’ve been working with a few first time home buyers inn trying to help them find their first home, and to be honest, it’s been frustrating, not only for them but for me as well, as their agent.
So when will this give, and what is causing the market to continue to climb?
Simple. Lack of inventory.
In trying to explain this to investors, I’m reminded of my second year micro economics class where I had the most condescending economics professor ever who every Tuesday at 830am for 3 HOURS would lecture us, not om the merits of supply and demand but how we would never amount to anything in the real world. Here I am, many years later educating my clients and investors on how this is causing the housing market to be artificially propped up by a lack of investor. Who knew, right?
So, what are some of the things that are causing the market to continue to roar?
1. Cashing out of Toronto
Given the proximity to Toronto, what we are finding is that a number of investors are simply cashing out of Toronto in favour of green space. If the pandemic has taught us anything, it’s that remote working is here to stay. Many Toronto buyers are buying properties in Hamilton and Niagara for cash and still having money left over. It’s hard to compete with that if you’re an investor or a first time home buyer.
2. Underperforming Investments
Let’s face it. Many of us who invest in stocks, bonds or mutual funds, our investments have likely taken a bath throughout the pandemic. Investors are looking for a better way and many have had their interest peaked by real estate. While they may not like the idea of tenants, toilets and turmoil they can’t argue with the returns investors are getting. Just last year I started working with first time investors in their 60s. That’s right. Are they nuts? No, not at all, in fact, it’s never too late to start.
3. The need for recreational properties
The other thing driving the market now is an increased push for recreational properties. With lockdowns now becoming a think of the norm and further travel restrictions, people are looking for green space and the ability to travel domestically. In the last year I’ve sold a number of cottages from people I never thought I would ever sell cottages too.
The bottom line is this. Don’t get discouraged. There are deals out there to be had, you just need to know where to look for them. Activity is key. Get out there with your agent and keep writing offers. You may have to kiss a few frogs to find the right property, but you will.