What are the new Canadian HELOC rules?

For many Canadians, owning a home is the best investment because it offers an array of benefits. Although there are many advantages to homeownership, one of the most significant is the ability to borrow against home equity. I know many of you are aware of this or may have already taken advantage of it, but due to new regulations drafted by banking regulators, this benefit is changing. Homeowners will have less access to their equity, and the underwriting requirements will be tightened.

Here's everything you need to know about the new Canadian HELOC rules.

New HELOC Rules: What You Need to Know

The new regulations that will be enforced late 2023 will limit the amount that property owners can tap into their home equity, primarily targeting combined loans. Homeowners can currently borrow up to 80% of the loan's value, but the new regulations lower it by 15%, making them repay some of the principal after exceeding the new threshold of 65%.

New Bank Requirements: How They Will Affect Borrowers

Banks are also changing their rules, now taking an individual's credit limit into consideration regardless of how much they have borrowed. These additional financial factors mean that some borrowers may no longer qualify for a HELOC.

Why Are These Changes Being Implemented?

The new rules are being put in place to protect the housing market during a vulnerable time and ensure federally regulated financial systems are prepared for economic risk or shocks. Don't think these changes have come out of nowhere, as OSFI has been reviewing HELOCs for a time because of their potential risks. One of the major implications is that borrowers who are struggling to pay off their debts could utilize these loans, which could create a "robbing Peter pays Paul" scenario, in which the HELOC becomes the primary source of financing. Additionally, HELOCs typically have interest-only payments, which can create a risk that the principal won't be repaid over time.

To eliminate these risks, the new guidelines require an equity of at least 35% in mortgage revaluations, up from the current 20% requirement. This means that now borrowers must have more equity in their homes to qualify for these kinds of loans. While this change may assist with reducing the risks associated with HELOCs, a few specialists say the risks are not as significant as certain regulators believe.

Canada's new HELOC rules

The change in mortgage lending rules requires lenders and borrowers to meet their loan obligations; it simply means that now it has become more difficult to get qualified for a HELOC. Borrowers may never again utilize HELOCs, regardless of whether they were valid before. Consolidated credit can assist homeowners who want to take advantage of a HELOC before it's too late. So, it is important to be aware of the changes and conditions of the new Canadian HELOC rules and then take the proper decision

Last Updated:

2023-04-12

Real Estate Canada

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Will The Housing Market Crash in Canada? Reasons

Looking at the current scenario, you might be wondering, **Will The Housing Market Crash in Canada?** Not sure, which way the Canadian real estate market is heading? Here we discuss how the housing market boom is winding down and how it impacts home buyers and sellers. Canadian Housing Market ----------------------- Analysts say that Canadian household prices will fall by up to 20% this year as rising interest rates impact the country's thriving real estate industry. Mortgage rates are expected to rise once more as the Bank of Canada vigorously raises interest rates to combat spiraling inflation. Economists predict that higher borrowing rates will cause significant price drops in some of the most volatile markets. The COVID-19 pandemic sparked a surge in activity in the Canadian housing market. The combination of lower interest rates and historic fiscal support urged many Canadians to update their accommodation. As a result, nearly all metrics of housing market activity skyrocketed. The increase in housing-related borrowing, expenditure and investment helped prevent worse economic and financial outcomes during the subsequent recession. Recent Boom in The Housing Market --------------------------------- Who could have anticipated that a global pandemic would be sending the Canadian real estate market into hyperdrive? After breaking sales numbers across the country in 2020, those records were broken again in 2021, as demand continued to surpass the number of available properties, pushing up costs. Add in rising inflation, and it will take "years" for the market to rectify itself and come back to pre-pandemic levels, according to the government's December financial update. With each passing month, Canada's red-hot property market rages on, showing no signs of abating. More than 580,000 residences were bought and sold in the first ten months of 2021 alone, outpacing the total for the entire past year, when a record 552,423 homes changed hands. Overall, the nationwide MLS Home Price Index ended the year up a record 25.3% from the previous year. How The Canadian Housing Market is stabilizing? ----------------------------------------------- The real estate market is now displaying signs of cooling. In September, house price appreciation slowed to its weakest pace in seven months. Permits to build and home sales appear to have exceeded in March, with data from the previous five months indicating a visible slowdown. Furthermore, raw material prices are responding to normalizing demand. The second-quarter GDP report revealed a significant decrease in commissions and fees regarding sales activity. It is coherent with Canadian Real Estate Association data, which shows a 15% year-over-year decrease in total transactions. The market's supply side is becoming depleted. The COVID-19 crisis drove many Canadians to purchase new residences, with low-interest rates and a flood of fiscal assistance inspiring high demand. Aside from the historically low borrowing rates, pandemic-induced shifts in choices drove potential buyers to seek out larger homes. However, with the mass acceptance of vaccination and adjusting to the new normal, this dynamic appears to be nearing its end. House price growth is now starting to slow. Increases in new-home prices over the previous year peaked in May. Interest rates remain expected to rise as the Federals reduce its capital spending. It is anticipated that the bank's monetary stimulus programs will end in early 2022, but lawmakers will allow investments to mature off the income statement rather than engaging in a full hinge of selling securities. The end of the programs will mark the first interest rate inflexion point. Factors Contributing to Slowdown of Housing Boom in Canada ---------------------------------------------------------- Some of the crucial factors to note are: ### 1.Rapid growth in the last two years One of the main reasons people see the Canadian housing market bubble as an obvious danger right now is the market's speed over the last two years. While prices have been rising for decades, we saw an unparalleled acceleration in 2020 and 2021. Simultaneously, interest rates were good enough to allow Canadian consumer debt to reach new highs, making us even more susceptible to potential economic shocks. There is the psychological component that has been observed in recent years of people wanting to buy for fear of being left out. Not only were valuations high, but so were sales, implying that an even larger number of people purchased at high prices. While there are aspects like the mortgage stress test, there are ways around them, and these high-risk loans combined with amazingly high debts could spell trouble when interest rates rise. ### 2.Prices still have room to slip. A drop in house values is one of the factors that has been widely anticipated for the next year or two. RBC Economics recently estimated that home price growth would slow through 2022 and that home prices would fall in 2023. Higher interest rates are already impacting urban centers like Toronto, where prices are falling after reaching a peak. A drop in housing values is not the same as a bubble burst. A slow decline is preferable to continue price increases. What this does show is that there is a very real possibility that the market will falter. Things will not be as bad if the price decline is well handled and incremental. ### 3.Interest Rates and Rising Prices With record-low interest rates over the last two decades, the Canadian economy escaped the pandemic relatively unharmed. However, it also increased inflation, and we are now facing the consequences. House prices are already beginning to react as the [**Bank of Canada raises interest rates**](https://getnewhouse.ca/blog/what-does-higher-interest-mean-for-housing-market-in-canada). However, there is still plenty of unfulfilled demand to keep prices rising for the time being. As interest rates increase to fight inflation, there is a risk of a recession, which could significantly reduce activity in the Canadian market and cause many to offload, causing the market to fall. Again, it all boils down to how quickly changes can occur. ### 4.Government Rules and Regulations One of the most recent notable slowdowns in Canadian home prices occurred in 2016 and 2017 when government agencies enacted a slew of new housing restrictions to help stabilize the market. The new changes were effective for a time until home values began to rise again. This demonstrates, at the very least, that government regulation can affect buyer sentiment. Will Canadian Housing Market Crash? ----------------------------------- While the Canadian bubble could erupt this year, it appears to be a less likely scenario overall. The prices are stabilizing a bit, but the housing supply issue still exists. With massive number of immigrants pouring in the coming years, it would be interesting to watch this price correction. After all, [**new immigrant home buying**](https://getnewhouse.ca/blog/can-new-immigrant-buy-house-in-canada/) dreams become even more stronger after being here for sometime. And, houses are in limited supply! That being said, no one can predict if the market will crash or simply stabilize. Rising inflation, high interest rates coupled with reduced purchasing power will definitely impact the prospective buyers. However, as an investor, it is critical to understand the possible routes you may take. So, prepare and capitalize on opportunities while safeguarding yourself from losses. Observe the ongoing changes carefully and take wise steps in the dynamic Canadian Housing Market. _Wishing to share your opinion on the trending housing market in Canada? Fee free to discuss here._

What it means when a home is listed for 1$ in Canada?

Have you ever seen a house listed in Canada with a price tag of just $1? Yes, you read that right - just one dollar! I am sure at that time, you must be wondering like whether it's some kind of joke or there is actually something wrong with the property. But let me tell you that, if you are into real estate or know something about it then it's not a new thing for you to see homes being listed for lower prices than their actual price. But a property listed at $1 is something that is really hard to believe, isn't? Don't worry! Even if you still not aware of this then today you are going to find out the meaning behind a home listed for $1 in Canada. Navigate through some points that buyers should be aware of before making an offer for such properties. So, why are you still waiting? Head on to know it! ## Why Homes Aren't Actually Listed for $1 in Canada? First of all, it's important for you to understand that a home listed for $1 in Canada is not actually legal. The Canadian Real Estate Association (CREA) has strict rules and regulations that made it very clear that properties should be listed at their fair market value. And that value is determined by comparing the property to other similar homes in the area that have recently sold. Therefore, a home cannot be listed for significantly less than its fair market value. So, why do we see homes listed for $1 in Canada? The answer simply lies in the marketing tactics. By listing a home for a very low price, sellers and their agents try generate interest and excitement around the property. In the hope of attracting more potential buyers towards the property. ## The Marketing Strategy Behind $1 Listings Now you understood that it's a marketing gimmick but how does it works let's understand. The promotional strategy behind $1 home listings is actually quite simple. When a seller lists their home or any property for $1, it immediately catches the eye of potential buyers. And it generates a buzz and excitement among them, making the property seem like a once-in-a-lifetime opportunity and they immediately rush to it. The seller and their agent hope that this will attract a large number of potential buyers to the property and that's what it actually does. It drives up competition and ultimately leading to a higher selling price. The tactic has been used successfully in the past, with some properties even selling for millions of dollars despite being initially listed for just $1. There are many such examples like 60 West 1st Street, Hamilton (sold for over $800,000) , 1801 – 215 Queen Street East, Brampton (sold under $400,000) and many more such examples are there. But the point here is, you must remember that these cases are the exception rather than the rule. More often than not, a home listed for $1 will sell for much more than the initial listing price, but still less than its fair market value. ## Risks and Drawbacks of Purchasing a $1 Listed Home Now, let's see what are the risks that are hidden behind the tag $1. While $1 home listings may seem like a steal, buyers should be aware of the potential risks and drawbacks that comes with this. These properties may have significant issues or require major renovations, which could end up costing the buyer much more in the long run. Additionally, the competition for these properties can be fierce, leading to a bidding war and driving up the price beyond what the buyer is willing to pay. ## What to Consider Before Purchasing a $1 Listed Home? If you're considering purchasing a home listed for $1, then it's utmost important to do your homework properly. Before you jump into purchasing a home listed at a dollar, it's crucial to research the property thoroughly, you can talk to the local sellers or visit the property and try to assess any potential issues or renovation needs. It's also a good idea to work with an experienced and trusted real estate agent so that he can guide you through the negotiation and bidding process. But, always keep in mind that the final selling price of the home will likely be much higher than the initial $1 listing price. Another significant thing to consider here is the costs like closing costs, property taxes, and maintenance costs that came up with purchasing a home. These costs can add up quickly and can increase the real home buying price. So it's important to have a proper understanding of the financial commitment involved before making any offer. You may also like to learn about **[Home Inspection Tips - Red Flags to Look for!](https://getnewhouse.ca/blog/home-inspection-tips-first-time-homebuyers-red-flags-to-look-for)** ## What it means when a home listed for 1$ in Canada? A home listed for $1 in Canada is most likely a marketing strategy in order to generate interest in the property. One might ponder, is there some issue with the property or home that made it to list on $1 tag? Whatever the reason may be, as a buyers you should should be aware that the actual selling price will be determined through negotiation or a bidding process. There may be risks and drawbacks to purchasing a property initially listed for a very low price. Don't forget to do thorough research, work with a trusted real estate agent, and carefully analyze all factors before making a decision. So, the next time you come across a 1$ listed home in Canada, act smart and think about the idea and purpose behind such a listing.

Why is Immigration good for Canada?

Are you planning to immigrate to Canada? Great News! But, have you ever analyzed, **Why is Immigration good for Canada?** Let's understand why Canada welcomes more people and why it will keep doing so in the coming years. Immigration to Canada --------------------- **Immigration to Canada** has increased since the anti-immigration scandals and policies in the United States. Many immigrants are now choosing Canada as a place to start a new life. These have put the country on the world stage as an alternative place to live their dreams. Canada has always been a country that welcomes immigrants. But the United States' recent approach to immigration has led more immigrants to turn to Canada as an alternative. Why Immigration is good for Canadian Economy? --------------------------------------------- Read on as we explain why immigrants are beneficial to Canada's economy. 1\. Boost the Canadian Economy ------------------------------ The number of people working and paying taxes in every country is often the strength of its economy. Immigrants fill gaps in the labour force, pay taxes, and spend money on goods, housing, and transportation. The money helps in funding the country's public services. Canada needs qualified people to fill in various vacancies across its different provinces. Professionals or investors, whoever comes will be boosting the Canadian economy in one way or the other. 2\. Meet Labour Market Needs ---------------------------- Canada’s labour force has continued to grow every year due to immigrants. If it weren’t for immigrants, employers would have trouble finding enough qualified workers to fill available jobs. This is because Canadians are living longer and having fewer children. More people are also retiring, and there are fewer students in schools. These have limited the Canadian-born potential workers. Moreover, there has been an acute shortage of staff in a number of fields. So, the immigrants coming to Canada will help reduce this gap. 3\. Improve Health and Social services -------------------------------------- Many immigrants in Canada are young and economically active. They contribute more than they receive in benefits over their lifetime. According to reports, more than 335,000 immigrants work in health-related occupations. 20% of people as sports coaches in Canada are immigrants. One-third of people working in scientific research and development services are non-Canadians. Further, immigrant doctors, nurses, other staff, etc. can contribute in improving the stressed healthcare system in the country. However, this is possible after attaining the necessary qualification and experience. 4\. Sustain Canada's Education System ------------------------------------- International students contribute more than $21 billion to the Canadian economy every year. These include student spending and tuition. This is more than Canada’s exports of auto parts and lumber. International education is also an important pillar of Canada’s long-term competitiveness. More than 20% of all students enrolled in maths, computer, and information sciences programs are non-Canadians. Also, 15% of students enrolled in architecture, engineering, and related programs are international students. These expose Canadians to new cultures and ideas. It also stimulates innovation and develops cross-cultural competencies in the country. And, a number of these students stay on work permits or become Permanent Residents and then citizens. So, gradually they become a crucial part of the country's growth. 5\. Improve Trade Ties ---------------------- Many immigrants in Canada are entrepreneurial. They create jobs for Canadians and non-Canadians in all sectors of the country. These include construction, health care, retail trades, professional services, and many more. Immigrants have a desire to import goods from their home countries. They also export more because of their networks in their home countries. These broaden the variety of imports to export Canada, improving trade ties. Why Immigration is important for Canada? ---------------------------------------- Talking specifically, immigration is essential for the progress of a developed country like Canada. Here are the reasons to justify it. 1\. Support Ageing Population ----------------------------- The Canadian government uses the income tax paid by people working in Canada to support retired Canadians. Immigrants working in Canada have helped keep the economy growing and maintain its commitments to retired workers. Without immigrants, younger Canadians would pay more income tax per person. According to reports, 80% of working immigrants are under 45 years. This means they will have plenty of working years. These will also sustain the ageing Canadians 2\. Adjust to Canadian Society ------------------------------ The earnings of immigrants often match those of an average Canadian after a few years. These give them a sense of belonging. Some economic immigrants also catch up much more quickly within their first year. These make them more active in Canadian society, and many of them are members of social organizations. 3\. Real Estate Investment in Canada ------------------------------------ The great thing about investing in real estate in Canada is that it has no shortage of options. You can buy the property and manage it yourself. You can also take a hands-off approach and invest in a fund. Ultimately, you will find a method that fits your budget and schedule. Let’s look at the common ways to invest in real estate to know which ones might be best for you. ### Buy a House When you [**buy a home as new immigrant**](https://getnewhouse.ca/blog/can-new-immigrant-buy-house-in-canada/), you are putting your money in a long-term investment called _equity_. As your home increases in value, your equity increases. Also, you get a tax exemption for capital gain if you live there for most of the year. ### Buy Commercial Properties Investing in commercial property means buying and renting out space where people will work. Commercial property includes malls, shopping centres, industrial complexes, grocery stores, and offices. But it requires a large upfront investment. ### **Rent out Residential Properties** Becoming a landlord is not a bad idea as more Canadians are renting for long periods. As a property investor, you could rent out single-family homes, condos, apartments, duplexes, or even townhouses. These produce extra cash flow, and you could also benefit from the long-term appreciation of your property. **Real estate investment** could be a smart choice as an immigrant in Canada. You can also diversify your investments and create a solid stream of income till your retirement. You may also like to explore [**Best Place in Canada for Indian Immigrants**](https://getnewhouse.ca/blog/which-is-the-best-place-to-live-in-canada-for-indian-immigrants) Immigration in Canada --------------------- To conclude, we can say that immigrants contribute immensely to the Canadian economy. Not only do immigrants to Canada fill in the labour shortage gaps, but play a vital role in the country's progress.

Which is The Best Place to Live in Canada for Indian Immigrants?

Are you planning to move to Canada? But wondering, **Which is the best place to live in Canada for Indian immigrants?** Here we present an exclusive list of some of the **popular 6 cities for immigrants to live and settle down**. No doubt, Canada has been home to the largest population of **Indian immigrants**. Indians even have their street, specific market where you can buy any Hindi, Punjabi, Gujarati, etc. items and foods. Their language and traditions are now making grand within the communities. In fact, some places in Canada, don't let you feel home sick at all. You can follow your beliefs and culture, celebrate and enjoy like you would have done back in India. For those who are still contemplating which cities to immigrate to within Canada. Here are the most popular cities for Indian immigrants with their skilled and economic resources. Best 6 Cites to Live in Canada for Indian Immigrants ---------------------------------------------------- So, let's catch up with the details on the top cities for Indian immigrants wishing to move to Canada. 1\. Toronto ----------- The capital of the Canadian province of Ontario. The most populous city in Canada and the fourth in North America. This is the most popular city for Indian immigrants and over 40% lives there. Because of the plethora of job opportunities available in different sectors like technology, telecommunication, security, financial sector, and healthcare. Also home acquired skills jobs are in high demand like a cleaner, residential cook and more. You also have a lot of [fun activities to do in Toronto](https://getnewhouse.ca/blog/what-are-best-fun-activities-in-toronto-in-ontario-in-canada-for-adults), that also make it a busy tourist destination. The immaculate public transit system makes it easier for people, especially students to travel around the city and experience its beauty. That includes clubs, malls, cinemas, museums, and historical places. Remember, Toronto is quite an expensive city. It could really pinch your pocket especially as a new immigrant from India. But don't worry, If you can't afford it here, you can have a look at the [**10 Best Toronto Suburbs for Families to Live & Grow**](https://getnewhouse.ca/blog/10-best-toronto-suburbs-for-families-to-live-and-grow). 2\. Vancouver ------------- It is the most populous city in British Columbia, located on the pacific coast in western Canada. It is known for its beautiful nature, art scenery, and different thriving location for filming. The excellent standard of their universities makes the city have numerous international student immigrants. In terms of housing affordability is one of the most expensive cities in Canada and the world but is the most livable city. For an immigrant that loves to work in service industries, this city is the best option because it's their top tie. Others include construction, tourism, high technology, entertainment, manufacturing, mining, fishery & aquaculture, and forestry. Temperature degrees won't be the least of your worry because it is moderate compared to other cities. You may also like to learn about [**Top 10 Real Estate Companies in Canada**](https://getnewhouse.ca/blog/top-real-estate-companies-in-canada-largest/). 3\. Calgary ----------- Looking from the outside, Calgary might feel like an unusual destination for Indian immigrants whereas thousands of Indian workers and students live there. It is the largest city in Alberta province and the third-largest city in Canada. In terms of the economy, Calgary thrives in the energy sector and ability switch to a green energy source to meet its energy consumption needs. Other prosperous industries include mining, engineers, mechanical, entrepreneurs, technicians, health, financial service, and tourism. Calgary tends to receive a lot of snow in winter, which makes it more attractive for Indian immigrants who are not seen or used to snow. Living standard cost is pretty lesser compare to Vancouver and Toronto. 4\. Halifax ----------- Halifax is the capital province of Nova Scotia and is the largest municipality in its province and Atlantic Canada. Its port is one of the best harbors worldwide and significant in the Atlantic ocean. Halifax is a major cultural center within its province and a home to many region's major cultural attractions. Such as art galleries, theatres, and museums. It also hosts several festivals. It is easier for Indian immigrants to get a permanent residency in this province. By using Halifax- Provincial program or the Atlantic Immigration Pilot Program. For immigrants who prefer a place away from hustle and bustle of city life, Halifax is the best option. The temperature is not as harsh compared to other cities in Canada. 5\. Montreal ------------ Montreal is the second-most populous city in Canada and the most populous in the Canadian province of Quebec. It is one of the best place to live and study in Canada because of its several parameters and top-notch university reputation. For [**new immigrants**](https://getnewhouse.ca/blog/why-is-immigration-good-for-canada/) who want to travel with their families such as Indians who consider family as everything, Montreal is the best place to consider. The city is extremely safe with a low crime rate and holds abundant job opportunities. Searching for a job or part-time job as an Indian immigrant is not a hassle. The Quebec provincial government also support families with a monthly allowance for their kid. The allowance covers child support for kids below 18, school supplement for children between 4 and 16 years old, and supplements for disabled children. 6\. **Waterloo** ---------------- Waterloo is a city in the Canadian province of Ontario. It is one of the cities with the most cultural diversity in Canada with serval scenic views and places for younger people to have fun. Indian international students are attracted to this city because of the famous University of waterloo. The majority of Indian immigrant has made this city their home. Waterloo has a strong knowledge and service-based economy in significant insurance and high-technology sector. **To sum up** Choosing **the best place to live** or work in Canada as an Indian immigrant can be stressful. That's the reason we took the step to bring together the best places and their potential. So, do consider one of these top cities for Indian immigrants to settle down. A New Country, New Job & New Beginning! Keep in mind, settling in a new country comes with its own challenges! So, whether you are an Indian immigrant or from any other country, it may take some time to establish yourself at a new place. And, finding that perfect destination is not an easy task. Initially renting a house would be a good decision. But gradually, buying a house may prove economical (only when affordable amidst the sky-rocketing prices in Canadian real estate). Don't forget to find out if [**new immigrants can buy a house in Canada**](https://getnewhouse.ca/blog/can-new-immigrant-buy-house-in-canada/). Once you find the best place to live in Canada as an Indian immigrant, do share with us. Feel free to add your experiences and feedback.

Can New Immigrants Buy a House in Canada?

Are you a newcomer wondering, **Can a new immigrant buy a house in Canada?** We have the answers to your query. Moving to Canada with your family is a big step, and buying a new home there can be challenging. That is why many banks and lenders offer mortgage options for **new immigrants** to help them get settled. According to reports, the rate of immigrant homeowners has surpassed Canadian-born counterparts. Therefore, buying your own home as an immigrant in Canada is achievable. Nothing beats the feeling of getting the keys to your first home in Canada as a new immigrant. But empowering yourself to make the best decision about your new home is very important. What is an Immigrant Mortgage? ------------------------------ An immigrant mortgage is a special [newcomer mortgage program](https://fintrakk.com/mortgage-new-immigrants-canada-newcomer-programs/) offered by banks for new immigrants in Canada. These programs help them get a mortgage even when they do not meet the requirements for a regular mortgage. New immigrants in Canada are allowed to buy a home, even if they have just immigrated to the country. They also qualify for a mortgage as long as they meet the standard financial requirements. As a new immigrant, navigating the rules and regulations can get overwhelming. So, we have put together a detailed guide to everything you need to know about buying a house in Canada. Why it's difficult for New Immigrants to get Mortgage approved? --------------------------------------------------------------- Things are not that easy as they seem to be! As a [**new immigrant to Canada**](https://getnewhouse.ca/blog/why-is-immigration-good-for-canada/), it's difficult to get your mortgage approved. Let's see why so. ### 1\. Lack of Canadian Employment History One of the requirements for eligibility for a regular mortgage in Canada is Canadian employment history. Many banks want to ensure you’ve been working in the country for at least two years. These show that you have a stable level of income. ### 2\. Canadian Credit History An established credit history shows how consistent and responsible you are with your finances. Banks need a credit report to see how you handle your debt. They want to know if you have missed any payments or made late payments. So, new immigrants with no credit history can face challenges. Eligibility for a Mortgage as a New Immigrant in Canada ------------------------------------------------------- Let's see how new immigrants are eligible to get mortgage approval. ### 1\. Migrated to Canada within the last 5 years You must have immigrated to Canada within five years to be considered a new immigrant. Have you been staying in Canada for more than five years? If yes, you are no longer considered a new immigrant. ### 2\. Established Legal Status in Canada New immigrants with a temporary or permanent residence are eligible. Those with a non-permanent resident with a work permit are also eligible. ### 3\. Working full time for 3 months New immigrants do not need to have two years of employment history to get a mortgage. However, they must have at least three-month full-time employment history. You will need at least three months of full-time employment history. These laws exclude those that are relocated to Canada by their current employer. ### 4\. Have a 5% Down Payment A 5% down payment is mandatory for a new immigrant to get a house in Canada. These down payments also vary from one agent to another. For example, some lenders may require a higher down payment if the house price is over $500,000. ### 5\. Meet Qualification Ratios Your debt service ratio shows the percentage of your income that pays your debt. The higher this ratio, the more difficult it is to get a mortgage. This is because you are spending more of your income on service debt. How to Buy Your First House in Canada? -------------------------------------- Are you wishing to buy your first house in Canada? Here are few things to guide you. ### 1\. Have a Budget According to reports, the average house prices have sky-rocketed in Canada in the past few years. This price is due to the astronomical cost of houses in places like Vancouver and Toronto. However, the price of houses are cooling down a bit due to [**high benchmark interest rates**](https://getnewhouse.ca/blog/what-are-best-fun-activities-in-toronto-in-ontario-in-canada-for-adults) and other regulations. Keeping this in mind, new immigrants must have a budget when opting to get a house mortgage. They should know the down payment and monthly housing payment they can afford. Therefore, having a solid budget helps you understand how much house you can afford. ### 2\. Mortgage Approval Process Mortgage approval helps estimate your potential mortgage payments. The process of getting a mortgage approval varies from state to state. It also depends on your eligibility. Most banks and mortgage lenders approve the maximum loan you can qualify for. So it is important to understand the requirements at your stage. New immigrants must provide their income, assets, debts, and current employment information to get approval. After submitting this information, the bank or lender will evaluate the application. The application will be approved if they are qualified and rejected if they are not. ### 3\. Search for a Perfect House It is time to search for your dream home. Your mortgage approval often determines the kind of house you will search for. As a newcomer, it is advisable to partner with an experienced real estate agent. Ask your neighbours and friends if they know any trustworthy realtor that can help you through the home buying process. ### 4\. Get Home Inspection Done Home inspections help protect the buyer from any potentially serious and dangerous problems in the building. Therefore, it is paramount. But you will need to pay a fee to inspect the house. Your realtors or mortgage lenders can help you find a qualified home inspector if you don't have any. And yes, home inspection is very crucial part of the buying process. So, don't think of missing it out to save some money! ### 5\. Make an Offer After inspecting the house, it is time to make an offer on the property. Making an offer in Canada requires putting down a deposit. However, this deposit is different from your down payment. The deposit shows the seller you are serious about buying the property. Your deposit will be added to your down payment when you close on the house. But it is non-refundable if you walk away. ### 6\. Sign the Papers Buying and finalizing your house mortgage requires a lot of paperwork. You must first finalize your financing options and get your mortgage formally approved. These can be completed within a few weeks. Ask your realtor for help when navigating through the paperwork to ensure transparency. And here you are ready for getting the possession of your dream house on closing day! Buying Home as a Newcomer to Canada ----------------------------------- Canadian banks keep on updating their eligibility requirements with the newcomer mortgage program. So, you must be aware of the latest changes applicable. But, you will need to meet the basic criteria of [**home buying in Canada**](https://getnewhouse.ca/blog/renting-vs-buying-home-canada-better/) before fulfilling your housing dream.

Renting vs. Buying Home in Canada - Which is better?

Renting vs. Buying Home, is a common thought that comes to our mind. Moving to a new city or a country, you must be pondering what's the best option, rent or buy a house. And, the same stands true for the hot and happening real estate scenario in Canada. So, let's look for an answer to, **Is it better to rent or buy a home in the current Canadian market?** Having your own home is still a dream for many Canadian residents. Purchasing a residence not only provides you with increased social standing, it also proves to be a good financial investment in the long run. However, the annual cost of owning a residence is higher compared to a rented house. There is a very crucial aspect to be considered. Mortgage costs include both principal and interest, and the principal part can be viewed as a form of imposed saving. That's not it, there are so many factors to impact your decision. **Canadian Real Estate Market: Current Market Trends** ------------------------------------------------------ A previous study concluded that individuals who can afford a down payment should buy a house in Canada as they are more financially sound and capable of owning a home. The study showed that out of 90 percent, over 30 percent of owners were capable of providing a down payment. Another survey indicated that out of 278 cases analyzed, about 250 of them have the overall cost of ownership lower than renting a house. All these analyses paint a single conclusion that buying a house is more beneficial than renting one. Ah.... take a deep breath! Does this still hold true? Did you checkout the rising mortgage interest rates and the restrictions imposed by the Government to control the soaring housing prices in Canada? Will it cool down the real estate market? Or we are heading towards something different? No doubt, it will impact our purchasing power and reduce the mortgage eligibility, thereby putting tighter controls on the housing market. **Renting vs. Buying Home**: Pros & Cons ---------------------------------------- With so many different variables when buying a home, it is necessary to weigh all the positives and negatives properly: ### **Pros of Buying a Home** Here are some pros of purchasing a home: **1\. Better Wealth Creation** ------------------------------ When you pay your monthly mortgage installments, you generate capital. With each passing installment, you get one step closer to owning the property completely and thus converting it into a personal asset. It is something you won't be able to achieve while living in a rented house. **2\. A Sound Investment Decision** ----------------------------------- Since the population is rising at a breakneck speed, there will be a need for more space in the future. Thus owning a house is like sitting on a pile of gold. As it has been observed down the line that house prices always go up, owning a house can be beneficial to you in the long term. After all, Canada is the cherished destination of immigrants wishing to settle abroad. The Government is also trying to make housing affordable. May it be through expanding **[new construction projects](https://getnewhouse.ca/blog/is-new-construction-good-investment-property-ontario-canada/)** across cities or increasing supply to tackle the housing crisis. **3\. Security** ---------------- The best part about owning a house is paying a certain fixed amount as written in your mortgage agreement. However, there is no way to predict when the landlord will increase the rent in a rented space. Thus, buying a house seems to be a more secure investment. ### **Cons of Buying a Home** Below are some cons of purchasing a house: **1\. Big Deal with Huge Money** -------------------------------- Owning a home can also prove to be difficult for some. The very first reason is when you purchase a home, you make a financial commitment. Buying a home involves a huge sum of money, may it be in the form of a down payment, closing cost, repair or renovation, etc. Further, you cannot sell your property overnight or refuse to pay the mortgages. Although there are companies specifically to expedite the selling process if you want to sell the house, getting a home is only fruitful if you hold it for around 6-7 years. **2\. Repair & Maintenance Cost** --------------------------------- Sometimes getting a house can mean trouble for your wallet. If you live in a rented house, you won't be worried about upkeep costs as it will be the landlord's duty. However, living in your own house can be expensive as there are many maintenance-related costs for a new house. **Pros of Renting a Home** -------------------------- Here are some pros of living in a rented home: **1\. Easy on the pocket** -------------------------- Rent payments are typically lower than house payments and may encompass other expenses such as utility services, hydro, tv service, and internet. Though, it may not always hold true, since rents also sky-rocket in some parts of Canada. **2\. Adaptability** -------------------- Renting gives you the most versatility in the Airbnb era. Most leaseholds are for one year, but it is possible to negotiate a month-to-month contract. You could look for short-term renting through a home-lending webpage. If you have a sense of wonder or a fear of commitment, renting may be the best option. **3\. Negligible Repair Costs** ------------------------------- Living in a rented house can be cheaper than living in a newly bought house. Since you are paying rent, the landlord has all the responsibilities for making the required maintenance. It is not the case with buying a house. **Cons of a Renting a Home** ---------------------------- Here are some cons of living in a rented home: ### **1\. Not always a wise Investment Choice** Renters miss out on building equity because they avoid having to take out a monthly payment and pay the bills for operating a house. Instead, your monthly lease payment is used to pay someone else's mortgage. ### 2\. **No Sense of Security** The landlord may raise the rent following relevant laws. A rise in your rental payments may prompt you to begin packing. Renting vs. Buying Home: Which is better? ----------------------------------------- When talking about Renting vs. Buying a house, neither option is superior. There is no simple answer to this age-old question, and it will necessitate some soul-searching and number-crunching on your part. Moreover, the [**rising mortgage interest rates**](https://getnewhouse.ca/blog/what-does-higher-interest-mean-for-housing-market-in-canada) have further widened the dilemma of Renting vs. Buying a Home. What's best for you will be determined largely by your existing personal and financial scenario and your objectives and location. **Renting or Buying a House**, whichever decision you take, do consider the latest trends, analyze your pocket and then decide what you want. Feel free to discuss.

What does Higher Interest mean for Housing Market in Canada?

You might be hearing and reading a lot about the increased benchmark interest rates by Bank of Canada. Let's analyze the answer to the query: **What does higher interest mean for the housing market in Canada?** The Bank of Canada hiked its policy rate again in **December 2022**, thereby increasing the **interest rate to 4.25 percent**. The buyers are wondering for how long this rate hike spree will continue impacting their purchasing powers. **High-Interest Rate in Canada: Reasons** ----------------------------------------- The announcement of the **high-interest rate** of housing in Canada has become the talk of the country. Many people believe pent-up demand for homes is so high that supply is scarce. Hence, the Bank of Canada's decision to increase the benchmark interest rate will not take much of an edge on the real estate market. According to the report, the low housing rates have increased housing demand for many years. There have also been many home-ownership and move-up buyers and investors. But after decades, inflation has made the Bank of Canada alter its course. The bank has signaled a hike in interest rates in the years ahead. These will be a game-changer for the market. Home resales are expected to slow more quickly than previously anticipated. There will also be prices peaking this spring as market sentiment sours from extreme bullishness. Local markets could also experience a mild price correction, partly reversing outsized gains recorded in the past year. **The High-interest Rate is Real** ---------------------------------- Housing interest rates in Canada have been low for many years. And the Bank of Canada's move to raise its lending rate is real. The bank began to normalize its monetary policy in March, making the higher rates a reality. It had also announced a 0.5% increase to 1.0% on April 13, 2022. This has been the biggest one-time increase in interest rate since 2000. The Bank of Canada has also hinted to raise its policy rate to a neutral level by the end of the year. These might lead to an add up from 1% after six months to 2.0%. Or slightly above 1.75%. These might become a big problem because Canadians have not seen such an increase within a short period since 2005. This will likely impact businesses and individuals thereby influencing mortgages, GICs and savings accounts. ### **There is no way out** There has been an increase in fixed mortgage rates since the financial markets began to anticipate the Bank of Canada's new perspective. These have negatively impacted mortgage borrowing. This is because borrowers have gravitated toward variable-rate mortgages, which rates remained excee4ptionally low. But the Bank hiking campaign will soon make variable rates more expensive too. These will leave borrowers with no way out. ### **Reduced Housing Purchase** The increase in interest rate has increased the mortgage stress test’s qualifying rate. These have removed stretched-out buyers from the market. However, qualifiers will also see higher rates. These have reduced the size of the mortgage they can get and the amount they can pay. The new mortgage qualifying rate is supposed to protect the Canadian housing industry. But might make citizens settle for a lower budget or higher down payment on their mortgage. The rise in fixed mortgage rates will also shrink the maximum purchase budget by roughly 15% for medium earners. ### **Poor affordability for buyers** The higher interest rates will pose a massive challenge for many buyers. This is because the Canadian housing industry is at risk of reaching the worst-ever levels in years to come. According to research, it could reach that grim point by the third quarter, and the federal budget cannot prevent this from happening. Also, poor and worsening affordability might increase homebuyer demand across the country. **How Canadians are dealing with the increasing rate**? ------------------------------------------------------- According to a report, roughly half of Canadians are feeling the effects of rising interest rates. Another research suggests that Canadians are spending less due to increasing rates. [**Canadian housing market**](https://getnewhouse.ca/blog/renting-vs-buying-home-canada-better/) may also be cooling off as higher interest rates increase the monthly mortgage payments. These and many more are the things that Canadians need to battle with at this time. _What about rising inflation in the country? How to cope with it?_ **How the increasing interest rate can affect mortgages?** ---------------------------------------------------------- The increase in interest rates has made mortgages more expensive. Homeowners in cities with high-priced real estate will pay more money on regular mortgage payments. It has also affected lines of credit, cars, and student loans. The cost of paying off student loans will increase along with the interest rate. **Benefits of the High-interest Rate** -------------------------------------- A few plus points for a high bank interest rate could be: ### 1\. **Increased Bank Savings** Higher interest rates can be good news for individuals that save more. It could grow their bank account faster. Also, many fixed-rate investments such as guaranteed interest options will give higher returns. You may also like to learn about [**Top 10 Real Estate Companies in Canada**](https://getnewhouse.ca/blog/top-real-estate-companies-in-canada-largest/). ### 2\. **Increase Interest in Investment Portfolios** The total return on your investments will likely remain small. However, a rising interest rate means more income for your investment portfolio. These include fixed income such as bonds, stock, and Global Industrial Classification Standards. ### 3\. **Change your open mortgage** Changing your Open mortgage to a closed mortgage will limit the impact of the rising interest rate. This is because a closed mortgage is not affected by interest rate changes. High Interest Rate in Canada - Key Takeaways -------------------------------------------- Adjusting your savings and investments with the help of a financial advisor can deal with the rise in the **housing market in Canada**. An expert may be able to help you find solutions that give a better return as interest rates increase. But, the ultimate financial decisions should be yours. May it be beating inflation or bearing the rising interest rate scenario, you are the best judge to analyze your situation. _Relax!! And, observe how the high policy interest rates by Bank of Canada impact home buyers and sellers. Make a wise choice! Don't forget to share your opinion with us._

Top 10 Largest Real Estate Companies in Canada

Are you interested in learning more about the real estate topics? Here we will be highlighting the **Top 10 Largest Real Estate Companies in Canada**. Grab useful information on the best performers in the dynamic real estate world. Real Estate in Canada --------------------- Real estate has and will continue to be a great investment especially in an immigration friendly country like Canada. The exciting part about this business is that the risk is very low. To invest in real estate, you will need a credible, knowledgeable and skilled agent. There are several real estate agents in Canada but the fear of not falling into the wrong hands can be a hindrance. Canada has in store some of the **largest real estate companies**, and their real estate sector has contributed immensely to the economic growth in Canada. To be a good real estate agent requires you to have good knowledge of the business and also great skills. For these reasons, we have taken enough time to compile a list of the **top real estate companies** in Canada. Top 10 Real Estate Companies in Canada -------------------------------------- Take your time to read through this interesting list to have more knowledge about the top real estate companies in Canada. And yes, these are not in any sequential order. We just picked the most popular and the largest Canadian real estate companies. **1\. Onni Group** ------------------ This well-known real estate company has maintained being on the top list of best real estate companies for over five decades. They are greatly known for their unprecedented condo homes and commercial properties. Their development of residence so far is more than 15000 and they own various properties in different parts of North America, places like Vancouver, [**Ontario cities**](https://getnewhouse.ca/blog/category/ontario-cities/), etc. Onni offices are situated in various parts of Canada, Seattle, Toronto, British Columbia, Los Angeles, and other areas. Their goal is to develop top-notch urban towns in the world coupled with great sustainability and innovative designs. One thing that has made them stand out is their ability to develop principles on green architecture. Also, the materials and equipment used by this company are native and energy-saving respectively. Their great teams are also worth mentioning as they are well trained and skilled in this field. Some of their record-breaking projects are Gilmore Place, Cambie Gardens, Riva, Fortunate at Fort York, Atria west and lots more. 2\. Westcorp Property Management Inc ------------------------------------ This company has been around for over three decades which has made them more conversant with the needs and tastes of their clients. Their services include commercial, residential, retail, office and hospitality real estate. Westcorp Property Management Inc is well known in the commercial sector of real estate in Canada for its exceptional sales. Whitehall Square, Victoria Plaza, The Milner, Downtown Hotel, and Baywood Park are some of their projects in Canada. Over the years this company has been able to enhance its service which has made them become one of the best in Canadian real estate. 3\. Mattamy Homes --------------------- When referring to some of the privately-owned real estate development firms in Canada that make the most profit, Mattamy is one of them. Mattamy owns real estate assets in different parts of the country like the [**Greater Toronto Area**](https://getnewhouse.ca/blog/pre-construction-condo-vs-resale-investment-better-gta-canada/) and Calgary as well as certain parts of the United States of America. Some of Mattamy's projects include 360 condo and Vita on the lake. This business has been able to provide jobs to many and has also offered real estate services to different clients in various areas of Canada. One of their goals is to provide an eco-friendly home, and green building material and to motivate the use of smart technologies. 4\. Westbank Corp ----------------- The company headquarter is located in Vancouver and is one of the top real estate development companies in Canada which also have an international footprint. The company has luxury assets in both commercial and residential skyscrapers. Its reputation in the commercial real estate business, particularly in Calgary, is still being built. Westbank Corp dares to be different from other real estate companies with their exceptional artistry projects. That's one of the things that has grabbed the attention of many towards this real estate company. They are known to be the largest LEED Platinum developer in the world. Some of their projects are Shangri-La, Bank of Italy, Telus Garden and The Butterfly and 188 Keefer St. 5\. Pinnacle International -------------------------- It is one of the leading real estate companies in Canada known for developing luxury commercial, hotels and residential buildings. Over the years the company has been able to create thousands of residences and help to improve different areas in the country. With each of their projects, they have provided great design in terms of architecture and interior as well as deluxe amenities. This has helped them remain one of the best in the real estate market. 33 Bay, Pinnacle Grand Prix, The Prestige and The Sorrento are some of their projects. 6\. Tridel ---------- It is one of the largest and oldest real estate companies in Canada with its headquarter in Toronto. The company was founded by Jack DelZottto in 1934. This company has developed thousands of houses in Canada as well as wonderful communities. The Westerly, Queen & Church and Aqualuna are part of their projects. 7\. Canadian Brookfield ----------------------- This is a company that provides infrastructure solutions, private equity, management, credit and real estate investment which is globally recognized. So, it has landed in our list of top real estate companies in Canada. 8\. The Daniels Corporation --------------------------- This reputable real estate company has more dominance in Thornhill, Toronto, Mississauga and Brampton real estate markets. Their commitment to quality construction, innovative design and sustainability has been their hedge over others in the industry. Kilgour Estates, Artworks Tower and High Park Condos are some projects from them. 9\. Sorbara Group Of Companies ------------------------------ This is a real estate company that also provides property management, investment and construction. Their focus on growth has helped them to penetrate the real estate market. 210 Simcoe and 400 Wellington are some of their previous projects. 10\. Firstservice Corporation ----------------------------- For more than 20 years this real estate company has provided excellent experience and service to their clients. The satisfaction of their client has been their goal and concern which has helped with revenue generation and building reputation. You may also like to discover [10 Steps to Build a Successful Home Renovation Business in Canada ](https://getnewhouse.ca/blog/steps-to-build-successful-home-renovation-business-in-canada) Real Estate Companies in Canada ------------------------------- Whether you want to invest in real estate or planning to get your dream home in Canada, you will come across the company names added above. They have proven to be reputable companies with their various projects and contributions to the real estate market. May it be detached homes, semis, or other [**new constructions**](https://getnewhouse.ca/blog/things-to-know-before-buying-pre-construction-condo-in-gta-canada), these companies have made a strong hold in different Canadian provinces. This collection of **largest real estate companies** can help guide you through the real estate market in Canada. _**What do you think? Any other top real estate companies that we missed to include here? Do share with us.**_

Is Redfin available in Canada?

Redfin is an online brokerage platform that aims to make the buying and selling process more efficient. Redfin offers sellers the option to list their properties for as little as 1% commission, and buyers have access to agents who can help them find the newest listings, tour properties, and submit offers. Redfin is actually a US-based online residential real estate brokerage company that operates in some American cities. However, a lot of people are curious about its accessibility in Canada. Let's find out if it is available in Canada or not. ## Is Redfin available in Canada? **Yes, Redfin is available in Canada**. In 2019, the company launched a national Canadian real estate search site, began offering full-service agents to homebuyers and sellers in the greater Toronto area at a one percent listing fee, and gradually expaning to cover Canada's major cities. Customers can browse every home for sale listed online by agents in most Canadian provinces using the company's website and mobile application. Additionally, Redfin's Book feature allows homebuyers to schedule a home showing with an agent with just a few taps on a smartphone. ## Where does Redfin find listings? Redfin gets its listings from the Multiple Listing Service (MLS), an online real estate database that is frequently updated by real estate agents to guarantee the highest level of accuracy. This data is also used to compare listings in your preferred neighborhood and locate the most precise pricing predictions. ## Is the Redfin Estimate available in Canada? No, the Redfin estimate is not yet accessible in Canada, but this feature is anticipated to arrive there soon. However, many other features, including Redfin Hot Homes and Search by School, will also be accessible soon. Redfin buyers can use these features to learn when to act quickly by learning whether a home is likely to sell in two weeks or less based on the proprietary algorithm. They can also search all homes for sale served by a specific school. ## Redfin is available in Canada Redfin offers brokerage, rental, lending, title insurance, and renovation services to assist people in finding housing in Canada. The company keeps launching new features to provide more comfort to its customers. It has recently introduced a new feature that shows zoning details on home detail pages. As of now, more than 70 million homes' zoning information is available on its platform, making it the first real estate website to do so.

Pre-construction Condos vs. Resale: Which is better investment in GTA, Ontario?

Are you thinking of buying a new home in Greater Toronto Area (GTA), Ontario, or any place in Canada for that matter? **Pre-construction Condo vs Resale: Which should you invest in?** This is a common question that comes to your mind while taking such a big financial decision. We are here to reduce your home buying stress and provide information on the **hot and trending housing topics** in Canada. _"Congratulations on purchasing your new home"_ is a comment many people hope to hear. Owning a property is an achievement and a milestone. However, many people are confused about purchasing **real estate** properties. Should they go for a pre-construction or under-construction property or a resale property? To clarify this situation, **a pre-construction house** (talking of condos here!) is **a house yet to be constructed or undergoing construction**. While **a resale house** is **a property that has been constructed** and buyers can pack in after payments. Pre-construction Condos vs. Resale ---------------------------------- Now, let's check out **pre-construction condo vs. resale properties** to see which is better. **Benefits of Purchasing a Re-sale Property** --------------------------------------------- * **Its Tangibility:** Re-sale is tangible because prospective buyers go visit the properties to get a feel of the layouts. You can also physically assess the size of the buildings you want to purchase. * **Affordable Deposit:** Re-sale deposit is cheaper than other properties. It is popular among those interested in **real estate in Canada**. Additionally, you only make the deposit once. * **No Additional GST Cost:** Buyers don't need to pay additional GST after completion of the house. * **Property Transfer Tax Exemption:** Residents of Canada who meet all tax exemption criteria are exempted from paying resale tax. They are exempted when they buy properties worth at most $500,000. **Cons of Resale Properties** ----------------------------- * **The properties are used properties:** Resale properties are mostly lived-in properties or used properties that the owner wants to sell. Because of this, some buildings might have old-fashioned styles. * **Need for Renovation:** Since resale houses are old houses, new buyers need to renovate the buildings to make them look new. They might also need to change the decor inside the buildings. * **Not easy to customize:** It isn't easy for you to change the decor, floorings, lighting, and so on. * **No fixed payment:** No Fixed price means price negotiation is possible. However, this is also disadvantageous. Sellers can decide to organize bidding events where buyers compete to win the bid. Buyers may even purchase these properties at a price more than the original selling price. You may also like to learn about **[Home Inspection Tips - Red Flags to Look for!](https://getnewhouse.ca/blog/home-inspection-tips-first-time-homebuyers-red-flags-to-look-for)** **Pros of Pre-construction Condos** ----------------------------------- * **New Properties:** Unlike re-sale properties, pre-sale condos are newly constructed or undergoing construction. Therefore, the structures and designs are new and modern-looking. * **Easily Customizable:** If you purchased a [**pre-construction property**](https://getnewhouse.ca/blog/things-to-know-before-buying-pre-construction-condo-in-gta-canada), you have the power to suggest changes while construction is ongoing. You can decide to change the floorings, ceiling patterns, color schemes, cabinets, and so on. * **Long deposit period:** The gap between one deposit and the next increases. This makes it easy for buyers to spread their payments and meet up with the payments. * **Property Transfer Tax Exemption (PTT) for Canadian Citizens or Residents:** Residents of Canada who meet the tax exemption criteria are exempted from paying presale tax. For newly built homes, the PTT exemption is for purchase price of $750,000 , on the higher side as compared to resale condos. So, if you are an eligible purchaser, you can enjoy some extra benefits. **Disadvantages of Purchasing Pre-construction Condos** ------------------------------------------------------- * **Intangible:** Purchasing a house that has not been built means you can only see the house plan. You can't physically visit the site to check out the house because it has not been built yet. The builders may decide to change the house measurements to differ from what you were initially shown. * **Suddenly Rise in Interest rates or Mortgage Price:** Presale is different from resale properties where payment is a one-time or two-time payment. Presale payments can extend to two years or even ten years. The long payment time is quite risky because many things may happen to increase your mortgage. The [**interest rate**](https://getnewhouse.ca/blog/what-does-higher-interest-mean-for-housing-market-in-canada) in presale properties may increase suddenly. Other factors may also contribute to your inability to complete the payments. For example, you may become unemployed after paying the initial deposits. Without a job and an income, you can't meet up with the mortgage. The tax rate on properties may increase a year after you made your initial deposits. All of these contribute to the inability of some people to meet up with their payments. If you are unable to complete payment after construction is completed, you may lose the property. * **Expensive Deposit:** Presale deposits are three to five times higher than resale deposits. * **Extra Charges:** Presale buyers must pay extra charges like GST charges. Pre-construction Condos vs. Resale: Which is better? ---------------------------------------------------- After weighing the benefits and disadvantages, choosing re-sale or pre-sale hinges on the buyer. Are you sure you have the fund and the patience to wait? Then go for pre-sale condos that have modern looks. However, if your source of funds is not sure and you don't want to wait, go for resale properties. Resale property is a safer option, and there is a guarantee that you will pack in after payments. Which one would you prefer, investing in a [**new pre-construction property**](https://getnewhouse.ca/blog/is-new-construction-good-investment-property-ontario-canada/) or a re-sale one? The final decision is your, so make it wisely.