Rising interest rates: Hold, fold, walkaway or run? With peak summer behind and back to school looming, families are finally getting back to their regular routines. Heads-of-households can finally ponder their next big moves. Many wonder if it’s better to buy now into a market with higher prices and lower interest rates or waiting to buy into a future market with slightly lower prices but slightly higher interest rates. Sounds like a wash. Is it potato-potato… Or is there a difference?
According to PwC’s recent report “Emerging Trends in Real Estate in 2018,” condos are poised for success this year. Single family homes are also expected to yield modest growth. In Montreal, multi-purpose condo projects and rental complexes are seeing success, and are expected to dominate the market in the upcoming year. Unsurprisingly, the senior market is something to look out for. More than half of PWC’s survey interviewees recommended investing in the “age-restricted housing” sub-sector.
With the economy heating up, the Bank of Canada will raise interest rates to curb inflation. This will make borrowing more expensive and mean that fewer people will be able to borrow. Housing prices will drop because there are fewer overall shoppers.
There are a couple of ways this scenario could play out:
Lots of people are talking about buying smaller houses so when the rates go up they can actually continue doing there other activities. Smaller house but bigger life style!
I personally think that what we have seen for the last few years is something that we will not see again soon. Taking advantage of it is clearly a good option!
Even if you do all the calculation at a 5%, 6% or even 10% and factor in dropping house prices, the fact is that you should take advantage of what you have now because the chances of seeing rates like this again during any of your lifetimes are slim to none.
All told, Montreal still ranks as the third city in Canada for investment prospects, after Vancouver and Toronto.
If you have any questions or if you are looking for some guidance in selling or buying a property, please do not hesitate to contact me.
Claudia Lefebvre is a Chartered Real Estate Broker who thrives on delivering impeccable customer experience. Her passion for beautiful homes, building relationships while exceeding her customers’ expectations paved the way to her brilliant 10 year career in leading real estate companies like Remax du Cartier and Sotheby’s.
Now with Profusion Realty, Christie’s International Real Estate, she is recognized for her talent as a negotiator, her impeccable quality and highly personalized service for her carefully selected clients. When it comes to selling or buying a house, do not hesitate to contact her at (514) 581-1286, or visit her website claudialefebvre.com
Traditionally in Quebec the real-estate market’s demand dipped in the depths of summer— from St. Jean Baptiste to the end of the Construction Holidays. However, due to the widespread use of technology among homebuyers this seasonality in the demand in the local real estate market is quickly disappearing. As a result, the hot selling season was earlier, is now as well as all summer long. So dive in, the market conditions are just wonderful.
In recent years, mobile devices have created an « always-on » mentality among their users— which, let’s face it, is increasingly everyone. Homebuyers in particular, looking for every advantage to locate their dream homes in a tight seller’s market use the latest technological advances to get an edge over their competitors. While they may be on holiday, the most tech savvy home buyers set automated alerts for properties that match their characteristics. These latest tech tricks means that they’re always looking.
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