South Forest Hill Residences reviews.Some banks in Canada cut interest rates! The reduction in loan interest rates has made many potential buyers wonder whether it is time for “house prices to hit bottom”.Please Visit: South Forest Hill Residences reviews to Get Your VVIP Registration Today!
According to the average house price of the Canadian Real Estate Association, the average price in Canada has fallen 18.4% from its peak in February and could fall by more than 20% once the July data are released in the middle of the month. However, if you want to determine whether this is the best time to make a bottom, experts say you need to look at seven signals.
1. Time to buy a house.
If you are a potential home buyer, you may want to know when you can safely enter the water.
There will be some clues and warnings, but it is important to note that no one will predict the future and cannot accurately determine the turning point of house prices. But in most cases, the inflection point of house prices coincides with the time when they hit bottom.
two。. The price in your area.
People cannot rely on average house prices, especially across the country.
If you see average prices plummet, you have to dig deeper. Are similar types of houses (for example, four-bedroom, two-story) cheaper? Or are people just buying more apartments, driving down average prices?
The latter is a major factor at the moment, as high mortgage rates undermine people’s purchasing power. Economists call it the “component effect.”
Average prices are also unbelievably high because they are often affected by sales of high-end luxury homes. Some home sales of more than C $3 million can support average prices. But when people stop buying luxury homes worth more than $3 million, the average price falls. Similarly, this trend can be caused by the fact that housing loans are more difficult to apply for.
The median price is a better indicator of real house prices, but it is still affected by composition because it is impossible to find median price data across the country.
CREA did not release such data due to restrictions imposed by some real estate boards. I hope it will change later. At the same time, if you are in Ontario or BC, you can use sites like HouseSigma to get the median price.
Since median data are not available in most areas, people have to rely on the house price index (HPI), which is available from CREA, Teranet and RPS Real Property Solutions. HPI compares similar types of houses, which can make the price more accurate.
For signs that prices are bottoming out, when you notice that HPI in your area is starting to level out, it may signal an upward reversal in house prices.
3. House sales.
Home prices and sales have been plummeting because of soaring house prices and uncertainty among buyers. In many cases, the seller withdrew the house because it was not close to the offer they had expected.
So when you see home sales start to level off, it’s a sign that house prices are bottoming out. This data can be obtained from the monthly report of the Real Estate Board.
When the house cannot be sold, the inventory will pile up. With the increase in the number of houses for sale, people are becoming more and more desperate and cutting prices one after another. Others simply took the house off the market.
Fortunately, CREA believes that most markets do not have panic listings. But I’m not sure what will happen in the fourth quarter of this year or early next year.
Ideally, we want inventory growth to slow significantly or fall back. Usually the real estate bureau will provide these data.
5. unemployment rate.
Most people don’t have to sell their houses as long as they have a job and income. The collapse of the housing market is usually conditional on a sharp rise in unemployment. Today, Canada just reported an unemployment rate of 4.9% in July, which continues to remain at an all-time low.
However, some analysts believe that a strong job market will not last forever. If the bond market predictions are correct, we are less than 18 months away from the recession. By the traditional measure of negative GDP growth for two quarters, the US has entered a recession. However, the non-farm payrolls figures released in the United States today are bright, with an unemployment rate of only 3.5 percent.
The unemployment rate needs to rise by at least 0.5 percentage points to start driving job-related home sales, while a real collapse needs to rise by more than 0.5 percentage points. In addition, the rise in unemployment will take months to translate into home sales.
6. Interest rate reversal.
If you are waiting for an opportunity to buy a house, look at the following three indicators:
Signal that the central bank will end raising interest rates: maybe next year.
Canadian five-year bond yields continue to fall.
The bond market expects to cut interest rates over the next 12 to 18 months.
By the time these three things happen, the housing sell-off driven by rising interest rates will be over.
Robert McLister mentioned the last point: many real estate investors say they are waiting for bargains, especially given soaring rents and population growth brought about by immigration.
Now every serious buyer on the sidelines is paying attention to these clues. If you are a potential buyer, you should do the same.
On the other hand, if you misread these indicators and miss the opportunity to buy, it doesn’t matter as long as you have long-term preparation. This may take two, five or 10 years, and real estate values are always growing in the long run.
7. Mortgage interest rate this week.
Finally, McLister offers this week’s mortgage interest rates:
Although five-year bond yields plunged 80 basis points from their June peak, commercial banks did not cut five-year fixed rates without loan insurance.
Meanwhile, the lowest point of insured five-year fixed interest rates is down 40 basis points from a peak of 4.84 per cent in July.