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 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.

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.

Last Updated:

2022-12-19

Real Estate Canada

20 Real Estate Terms in Canada - List for Canadian Home Buyers, Sellers & Agents

Are you ready to conquer the Canadian real estate market, but feeling a bit daunted by the abundance of jargon and complexities? Don't worry, you're not alone! The real estate industry can be a minefield to navigate, but with the right knowledge, you'll be able to understand the ins and outs of the market and make informed decisions. So, whether you're a first-time home buyer, a seasoned seller, or a budding real estate agent don't let the jargon hold you back- let's unlock the secrets of the Canadian real estate market with the ultimate 20 real estate terms that you need to navigate the minefield of the Canadian real estate market and come out victorious. ## 20 Real Estate Terms in Canada - A Comprehensive List Knowing real estate terms is key to being a pro in the Canadian market. It's not just for first-time buyers or sellers; it's also for sellers and real estate agents who work here but are unaware of these terms. Because understanding the lingo is what sets you up for success here. For this reason, we have words ranging in complexity from simple words to complex terms. ## **20 Basic Real Estate Terms & Concepts to Know** So buckle up and let's dive in deep into the real estate world. ### **1. Amortization**: The length of time it will take to pay off a mortgage, calculated by dividing the total mortgage amount by the annual mortgage payments. It is the period over which the loan is planned to be paid off, usually in a range of 15-30 years. ### **2. Appraisal**: An evaluation of a property's value by a professional appraiser. Appraisals help to determine the fair market value of a property, which is used to help set a fair price for the property. ### **3. Closing Costs**: The expenses associated with purchasing a property, such as legal fees, land transfer taxes, and home inspection fees. These costs can add up to thousands of dollars and are typically paid at the time of closing. ### **4. Conditional Offer**: An offer to purchase a property that is contingent upon certain conditions being met, such as the successful completion of a home inspection. It means that the offer is made on the condition that certain things happen, such as financing or home inspection. ### **5. Equity**: The difference between the market value of a property and the outstanding balance on the mortgage. It is the portion of the property that the owner fully owns, and it increases over time as the mortgage is paid down and the property increases in value. ### **6. Fixed-Rate Mortgage**: A mortgage with an [interest rate](https://getnewhouse.ca/blog/what-does-higher-interest-mean-for-housing-market-in-canada) that stays the same for the entire term of the loan. It means that the interest rate will not change for the duration of the loan, providing predictability and stability for the borrower. ### **7. Home Inspection**: A comprehensive examination of a property's condition by a professional home inspector. Home inspection is an important step in the home buying process, as it can help identify any potential issues or defects with the property. ### **8. Interest Rate**: The percentage at which the lender charges interest on a mortgage. It is the cost of borrowing money, and it can have a significant impact on the overall cost of the mortgage. ### **9. Land Transfer Tax**: A tax paid by the purchaser when a property is transferred from one owner to another. It is a government tax that is paid on the transfer of property ownership and varies by province. ### **10. Listing Agreement**: A contract between a property owner and a real estate agent that outlines the terms of the agency relationship. It outlines the services that the agent will provide, the length of the agreement, and the commission that will be paid to the agent. ### **11. Mortgage Broker**: A professional who acts as an intermediary between borrowers and lenders to help them find the best mortgage product. They can help borrowers find the best mortgage rate and product that suits their needs. ### **12. Mortgage Pre-Approval**: A conditional commitment from a lender to provide a mortgage for a certain amount, subject to the buyer meeting certain conditions. It is a letter from a lender that states that you are pre-approved for a mortgage up to a certain amount, subject to certain conditions. ### **13. Multiple Listing Service (MLS)**: [MLS or Multiple Listing Service](https://getnewhouse.ca/article/what-is-mls-in-real-estate-canada) is a database of properties for sale by real estate agents. It is a system used by real estate agents to list properties for sale, and it is a valuable resource for buyers and sellers. ### **14. Power of Sale**: A legal process that allows a lender to sell a property in order to recover unpaid mortgage debt if the borrower defaults on the mortgage. It is a provision in the mortgage agreement that gives the lender the right to sell the property in case of default. ### **15. Property Condition Disclosure Statement**: A document that outlines any known issues or defects with a property. It is a statement provided by the seller that discloses any known issues or defects with the property. ### **16. Real Property Report (RPR)**: A legal document that shows the boundaries, dimensions, and location of a property, as well as any improvements or structures on the property. It is a detailed survey that shows the property's boundaries and any structures or improvements on the property. ### **17. Title Insurance**: Insurance that protects the buyer and the lender against any issues with the property's title or ownership. It protects against any hidden issues with the property's title, such as outstanding liens or encumbrances. ### **18. Underwriting**: The process of evaluating a mortgage application to determine whether to approve the loan and what terms to offer. It is the process used by lenders to evaluate a borrower's creditworthiness and ability to repay the loan. ### **19. Zoning**: Set of regulations established by local governments that determine how land can be used in a particular area, by dividing the municipality into different zones and regulating the development, density and allowed uses of the land. ### **20. Lease**: A lease is a legal agreement between a landlord and tenant outlining the terms and conditions of renting a property, including the rental amount, length of the lease and responsibilities of both parties. ## **20 Advanced Real Estate Terms & Concepts to Know** Now, let's get an idea on some of the advance terms used in the real estate industry. ## **1. ‘As Is’ clause** Let's learn about this real estate concept from both a seller's and a buyer's point of view. #### **For sellers** "As-Is" clause means property is sold in current condition, with no promises or guarantees from the seller. - It can be a quick and cost-effective option for sellers. - But, it also means that the buyer will have to take on any necessary repairs or renovations. - Legally required to disclose all issues with the property, including providing a detailed statement of condition, prepared by a professional, and based on an inspection. #### **For buyers** "As-Is" properties may come at a lower price, but they can also end up costing more if extensive repairs are needed. - It's crucial to do a thorough inspection of the property to reveal any potential issues. - Consider including a "subject to inspection" clause in the contract, which allows the buyer to back out if the inspection reveals more problems than initially disclosed by the seller. - Important to proceed with caution and have a solid team of professionals, including a real estate agent, home inspector, and attorney, to minimize the risk. For more details, refer [What does As-is clause mean in real estate?](https://getnewhouse.ca/article/what-does-as-is-where-clause-mean-real-estate-canada) ### **2. POA (Power of Attorney)** POA is a legal document that allows you to give authority to another trustworthy person(s) to manage your property or money on your behalf. - The person you appoint is called your attorney, and they do not have to be a lawyer. - It is required that a person be ‘mentally capable’ at the time of signing a POA for it to be valid. - Laws, requirements, and definitions of POA vary across provinces and territories in Canada. - Real Estate and POA In real estate, your attorney can manage buying or selling of real estate in your name, pay bills on your behalf, and even collect money owed to you, unless restricted to do so. Your attorney does not become the owner of your property, they can only manage it on your behalf. ### Types of POA - **General Power of attorney**: Allows your attorney to manage all or part of your finances and property only while you are mentally capable of managing your own affairs. Becomes invalid if you become mentally incapable. Can be limited to a particular task or time period. - **Continuing power of attorney**: Allows your attorney to continue managing your finances and property even if you become mentally incapable to do so. Can start immediately or come into effect when you become mentally incapable. ### **3. MLS (Multiple Listing Service)** MLS (Multiple Listing Service) is a database of properties for sale or rent, maintained by real estate agents and brokers. - It allows agents to share information about properties with other agents in their area, increasing the chances of a sale or lease. - MLS data is only available to real estate agents and brokers who are members of the service. - It includes detailed information about properties, including photographs, prices, and descriptions. - MLS can be a powerful tool for buyers, sellers, and real estate professionals to find and market properties. ### **4. CCIM (Certified commercial investment member)** CCIM (Certified Commercial Investment Member) is a professional designation for commercial real estate professionals. - It is awarded by the CCIM Institute after completing education and demonstrating experience. - Recognized as mark of expertise in commercial and investment real estate. - Only held by a select group of professionals. - CCIMs are trained to analyze investment opportunities. ### **5. CPM (Certified Property Manager)** CPM (Certified Property Manager) is a professional designation for property management professionals. - It is awarded by the Institute of Real Estate Management (IREM) after individuals complete a rigorous education curriculum and demonstrate their experience in property management. - The CPM designation is recognized as a mark of expertise in the property management industry. - Only held by a select group of professionals. - CPMs are trained to manage and maintain properties effectively and efficiently. ### **6. CMA (Comparative Market Analysis)** CMA (Comparative Market Analysis) is a report that compares a property to similar properties in the same area. - It is used to determine a property's estimated value, and to help with pricing decisions when buying or selling a property. - A CMA includes information about recent sales and current listings of similar properties. - It also includes information about market trends, such as average days on market and sale-to-list price ratios. - CMA is a helpful tool for both sellers and buyers to have a better understanding of the market and make informed decisions. ### **7. CRE (Commercial Real Estate)** CRE (Commercial Real Estate) refers to properties used for business or investment purposes. - It includes properties such as office buildings, retail centers, industrial warehouses, and multifamily apartments. - CRE transactions are generally more complex and involve more money compared to residential real estate transactions. - CRE professionals such as brokers, investors, and property managers have specialized knowledge and skills to navigate the market. - CRE can also include special purpose properties such as hotels, hospitals, and self-storage facilities. ### **8. CAC (Central Air-Conditioning)** CAC (Central Air-Conditioning) is a type of air conditioning system that cools a building or home by circulating chilled air through ductwork. - It typically uses a central unit, such as a furnace, to cool the air and distribute it throughout the building. - CAC systems are often more efficient and can cool larger areas compared to individual room air conditioners. - It can also improve air quality by filtering and circulating air throughout the building. - CAC systems require regular maintenance to ensure they are functioning properly and efficiently. ### **9. COI (Certificate of Insurance)** A Certificate of Insurance (COI) is a document that verifies that a specific insurance policy is in effect and provides details on the coverage provided. - COIs are typically issued by insurance companies or their agents and are used to provide proof of insurance to third parties, such as lenders or landlords. - COI includes: insured name, policy number, coverage type/limits, and insurance company/agent contact information. - Some COIs may also include additional information, such as endorsements or exclusions to the policy. - COIs are not the same as the insurance policy itself and do not provide all of the terms, conditions, and exclusions of the policy. ### **10. CMHC (Canada Mortgage and Housing Corporation)** Canada Mortgage and Housing Corporation (CMHC) is a Crown corporation of the Government of Canada. - Its primary function is to provide mortgage loan insurance to Canadian banks and other lending institutions. - This insurance helps protect lenders against losses if a borrower defaults on a mortgage loan. - CMHC also conducts research and provides information on housing markets and trends, as well as housing-related programs and services. - CMHC is funded by premiums paid by borrowers who take out mortgage loans that are insured by the corporation. ### **11. CMA (Comparative Market Analysis)** A [Comparative Market Analysis (CMA)](https://getnewhouse.ca/article/what-is-cma-in-real-estate-canada) is a report that compares a property to similar properties that have recently sold or are currently on the market. - It is used by real estate agents, appraisers, and homeowners to estimate the fair market value of a property. - A CMA typically includes information such as the property's location, size, condition, and features as well as information on comparable properties, including their sale prices and other relevant details. - It is based on recent sales data, it helps in determining the current market value of a property - It is used to set the price for a property that is for sale or to be appraised. - A CMA can also be used to evaluate the potential return on investment for a rental property or a fix and flip investment. ### **12. ARV (After Repair Value)** After Repair Value (ARV) is a term used in real estate investing to refer to the estimated market value of a property after any necessary repairs or renovations have been completed - It is used to determine the potential profitability of a fix-and-flip investment or the maximum purchase price for a property being considered for a rental or rehab project. - ARV is calculated by taking the estimated market value of a property in its current condition, subtracting the cost of repairs and renovations, and then adding any potential value-adds such as an addition or a finished basement. - It is an estimate of the potential of the property in the future after the repairs are done - It helps in determining the maximum amount to be spent on the renovation and property purchase, so it doesn't exceed the potential value of the property after renovation. ### **13. LTV (Loan to Value)** Loan-to-value (LTV) is a ratio used in the mortgage industry to indicate the size of a loan compared to the value of the property being used as collateral. - It is calculated by dividing the loan amount by the value of the property. - It is used by lenders to determine the risk of a loan and the creditworthiness of a borrower. - A higher LTV ratio indicates a higher risk to the lender, as the borrower has less equity in the property. - LTV is used to determine the minimum down payment, interest rate, and maximum loan amount - Lenders usually have different LTV ratios for different types of properties and loans. - A high LTV ratio may require a higher interest rate or mortgage insurance. ### **14. Cap Rate** The Capitalization Rate, or Cap Rate, is a measure used in real estate investing to indicate the rate of return on a property based on its income and purchase price. - It is calculated by dividing the property's net operating income by its current market value or purchase price. - Cap Rate is a metric used to compare the potential returns of different properties. - A higher cap rate indicates a higher return on investment, and a lower cap rate indicates a lower return. - Cap rate is used to evaluate the performance of a property and its potential as an investment. - Cap rate can be used to compare the yields of different properties and areas, even though it is a ratio, it does not take into account the cost of debt. ### **15. GDS (Gross Debt Service)** Gross Debt Service (GDS) ratio is a measure used by mortgage lenders to determine a borrower's ability to afford the mortgage payments on a property. - It is calculated by dividing the total mortgage payments, including principal, interest, property taxes, and heating costs, by the borrower's gross income. - GDS is one of the two ratios used to qualify borrowers, the other being TDS (Total Debt Service). - It is used to evaluate the borrower's ability to meet the housing cost, it is usually expressed as a percentage. - Lenders usually have a maximum GDS ratio, typically between 31% and 39% - A high GDS ratio may indicate that a borrower is over-extended and may have difficulty making mortgage payments. - A low GDS ratio may indicate that a borrower has a lower risk of defaulting on the loan. ### **16. TDS (Total Debt Service)** Total Debt Service (TDS) ratio is a measure used by mortgage lenders to determine a borrower's overall ability to afford the mortgage payments on a property, as well as their other debts and expenses. - It is calculated by dividing the total monthly debt payments, including mortgage payments, credit card payments, car loans, and any other debts, by the borrower's gross income. - TDS is one of the two ratios used to qualify borrowers, the other being GDS (Gross Debt Service). - Lenders usually have a maximum TDS ratio, typically between 42% and 44% - A high TDS ratio may indicate that a borrower is over-extended and may have difficulty making mortgage payments and other debts. - A low TDS ratio may indicate that a borrower has a lower risk of defaulting on the loan and other debts. ### **17. JT (Joint Tenancy)** Joint Tenancy is a type of co-ownership of property where two or more individuals own the property together. - Each owner holds an equal and undivided interest in the property. - Joint tenants have the right of survivorship, meaning that if one of the owners passes away, their interest in the property passes automatically to the remaining owners. - In a joint tenancy, all parties have equal rights and responsibilities on the property - Each joint tenant has the right to use the entire property. - All the parties need to agree to sell the property or make any changes to it. - In case of death, the share of the deceased tenant automatically goes to the surviving tenant/s. ### **18. TIC (Tenancy in Common)** Tenancy in Common (TIC) is a type of co-ownership of property where two or more individuals own the property together, but each has a distinct and separate share of the property. - No right of survivorship, meaning if one owner dies, their share does not automatically pass to the remaining owners. - Allows multiple parties to invest in real estate together or pass assets onto beneficiaries. - Each tenant owns a specific percentage of the property and can sell or dispose of their share. - Tenants have right to use entire property, but cannot sell or make changes without agreement of other tenants. - In case of death, share is passed on according to will or testamentary disposition, not automatically to surviving tenants. - Different from Joint Tenancy which has equal shares and right of survivorship. ### **19. Lien** - A lien is a legal claim on a property that gives a lender or other creditor the right to seize the property if the borrower or property owner fails to fulfill their obligation. - Liens can be placed on property for unpaid debts, taxes, or other financial obligations. - Liens can be either voluntary, such as a mortgage, or involuntary, such as a judgment lien. - Liens are recorded in the public records, this means that they are visible to anyone who searches. the records. - When the property is sold, the lien must be paid off before the sale can be completed. - If the lien is not paid off the property may be foreclosed or seized by the creditor. ### **20. Ontario Agreement of Purchase and Sale** The Agreement of Purchase and Sale (APS) is a legally binding contract between a buyer and a seller for the purchase of a property in the province of Ontario, Canada. - Outlines terms and conditions including purchase price, closing date, and contingencies. - Prepared by a real estate agent or lawyer, reviewed and signed by both parties, and a copy provided to each. - Includes schedule of chattels and fixtures, closing date, and contingencies, if any. - Legally binding contract, both parties have legal obligations and rights related to the sale. - Buyer typically pays deposit held in trust until closing. - Starting point for completion of sale transaction and ownership transfer. ## Knowing the Canadian Real Estate Concepts The understanding of the real estate terms specific to Canada is essential for home buyers, sellers and agents in order to navigate the market and make informed decisions. Being familiar with terms such as CMHC, ARV, LTV, Cap Rate, GDS, TDS, JT, TIC, CMA, APS, and others, can help you understand the mortgage process, evaluate properties, and negotiate the terms of a sale. Whether you're a [first-time home buyer](https://getnewhouse.ca/blog/renting-vs-buying-home-canada-better), an experienced investor, or a real estate agent, having a solid understanding of these terms will help you make the most of the Canadian real estate market. Did we miss any important term here? Do you wish to include any other interesting concept on real estate in Canada, do comment and share your views.

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.

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._

Top 10 Best Cities to Live in Ontario, Canada

Are you thinking of moving to the Province of Ontario in Canada? Wondering, which city to move and settle down? Here we present a collection of the **10 Best Cities to Live in Ontario, Canada**. Cities in Ontario, Canada ------------------------- The **Ontario cities** offer greater access to housing, food, healthcare, employment, and quality of education. It also assures freedom, political stability, a quality environment, and job security. These cities are considered safe places to live and offer an incredible lifestyle. While there are amazing cities in this part of Canada, there are also some places to avoid. Here are the 10 best places to live in Ontario, Canada. Best 10 Cities to Live in Ontario, Canada ----------------------------------------- Let's catch up with the preferred Ontario cities and dig deeper into the pros and cons of living there. 1\. Burlington -------------- Burlington is tagged as one of the best cities to live in Ontario. A great city located on Lake Ontario between Hamilton and Oakville. It is about a 45 to 60 minutes drive from Toronto and offers a good location and natural scenery. Its proximity to major industrial hubs and nearby cities makes [Burlington a great place to settle down](https://getnewhouse.ca/blog/is-burlington-a-good-place-to-live-ontario). The average home price of a detached house in Burlington is about $1.1 million. The city is a waterfront city that offers a unique balance of greenspace, city living, and tranquility. Plus a bustling environment that features restaurants, nightlife, malls, and local businesses. Crime rates are lower when compared to major cities, making it a safe place to live. 2\. Oakville ------------ Oakville is a suburban town within the Halton Region and part of the Greater Toronto Area. It is known for its beauty, cleanliness, and safety, with green recreational spaces and several parks. The city is a family-friendly place to live, with excellent schools and family-oriented activities. Oakville's median a detached house price is around $1.5 million. The city has been ranked as one of the best places to live in Canada for many reasons. The diversity of the housing stock and beautifully designed homes make it a desirable place for many residents. To get more information, don't forget to discover, [**Is Oakville in Ontario a good place to live?**](https://getnewhouse.ca/blog/is-oakville-ontario-canada-good-place-to-live/) 3\. Waterloo ------------ Waterloo is the best for you if affordability is one of your prime concerns when moving to Ontario. It offers a unique blend of urban and rural living with a growing tech and innovation hub, top learning institutions, and business parks. Its proximity to Toronto also makes the region an attractive place to settle. Waterloo's housing price is just over $700,000, making it far more affordable than the properties in Toronto. Also, there are job opportunities in Waterloo. So its residents do not necessarily need to find employment in Toronto. 4\. Thunder Bay --------------- Do you want to live somewhere safe with an outdoor lifestyle and job opportunities? You might think of living in Thunder Bay in Ontario. It is a large city near Lake Superior. Its location on a freshwater lake makes it spectacular and nature friendly. There are many outdoor adventures for the residents. These include fishing, hunting, and hiking. Also, this city is ideal for people who want reasonably affordable housing with many amenities. 5\. Stratford ------------- Stratford is a city on the Avon River and one of the best places to settle in Ontario, Canada. The city offers the best of both worlds with the comforts of urban living alongside a small-town feeling. It is known for its incredible annual festivals. Each year, a different part of the city acts a variety of the noble Shakespeare plays as drama viewed as part of their annual Stratford Festival. Stratford's weather is not harsh, and the crime rate is low compared to Ontario. The unemployment rate in Stratford is low due to the diverse job opportunities in the area. It's also a safe place to live. 6\. Kingston ------------ Kingston is a beautiful city with a lot of history and islands. It is family-friendly and thus suitable for anyone that wants a peaceful life for their children. The city has a cultural community, making it ideal for someone interested in theatre, arts, or music. Kingston has a good food scene and great restaurants, and the housing is affordable compared to other cities. 7\. Barrie ---------- Barrie is a city with every amenity you need to live a happy and fulfilled life. It offers city living on the beautiful Lake Simcoe in proximity to Toronto. The average cost of a home in Barrie is just over $700,000, with an abundance of nature, sports, and many activities. Barrie's is home to several gourmet restaurants, cafes, bars, breweries, and nightclubs. The city also has a mountain resort and spa. 8\. Hamilton ------------ Hamilton is one of Canada’s leading industrial centers and the hub of an extensive fruit-growing district. It is considered one of the best places to live in Ontario, with natural landscapes, trails, waterfalls, and beautiful lookouts. It is known for its high-quality life, arts, heritage, and cultural scenes. Hamilton is also conveniently located within a network of highways making it easy to commute to other cities for work or leisure activities. 9\. Toronto ----------- Toronto, the Capital of Ontario Province, is one of the preferred cities to move not only for Canadians but immigrants too. The city has over two million residents and is one of the best places to live in Ontario. It has people from different communities and is the most populated city in Canada. 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), and this makes it a favorite tourist destination. Toronto is Canada’s financial capital and home to many private IT companies with a stable economy, making it conducive for business. It offers the perfect mix of business, culture, and entertainment and is one of the world’s most economically powerful cities. However, it is an expensive city to live, owing to the rising inflation, increased housing rents, higher mortgage rates, etc. Toronto has an average home price of $1 million for a two bedroom house. Doesn't that sound too much? If yes, you can also think of moving to one of the [**Best Toronto Suburbs to live and grow**](https://getnewhouse.ca/blog/10-best-toronto-suburbs-for-families-to-live-and-grow). No doubt, Toronto is one of the best options if finding good employment is your priority as there are opportunities across numerous industries. 10\. Ottawa ----------- Do you prefer living in an urban environment where many things are going on? Then Ottawa is ideally the best place for you. It is one of the most affordable places to live in Canada, as the average price of a home is under $800000. Also, it is the best place to live for job opportunities across multiple sectors. The city is rich in history from the buildings and museums. It is highly populated and the best place with beautiful nature for walking, skating and hiking. This beautiful city is known for hosting a series of festivals year-round with ideal and pleasant weather conditions. Ottawa is known for low crime rates and guaranteed healthcare services in the city. **Note:** The housing prices stated above are based on **Housing Market Report for September 2022**. These are subject to change as per changes in market scenario. The Canadian real estate market prices are fluctuating at a much faster rate owing to changes in interest rates and demand/supply factors. ### Which are the best cities in Ontario for living? Moving to one of the **best cities in Ontario** can be a big decision with a lot of challenges. Therefore, make adequate efforts to ensure you understand what you are getting yourself into. Do proper research, analyze the advantages and disadvantages of living in a particular city, and then go ahead to get your dream home. _What do you think? Which is the best city to live in Ontario? Feel free to share your feedback and suggestions._

Best Land Loan Options in Canada 2023

For many Canadians, investing in land can be a wise decision because it is said that "Real estate cannot be lost or stolen, nor can it be carried away". Land, whether for private or commercial use, can provide long-term benefits especially places like Canada. As a result nowadays, investment in land is considered as the safest if done with proper research and carefully. However, it is also known that buying land is costly, and many individuals don't have the enough money to buy that so they tend to go for borrowing money from their relatives or loan from the bank. So, if you want to buy land in Canada and thinking to take loan then you must know the various types of loans especially for buying land. There are various types of land loans available in Canada, each of which is designed to allow people to refinance or purchase land there. In this blog, you will explore the different options of land loans available to you, learn about the application cycle, and discover the interest rates associated with each decision. So, let's dive in. ## What is a Land Loan? A land loan is basically a loan for buying land. It looks like a mortgage, but instead of buying a house, you're buying a land piece - could be a farm or just a vacant lot. But here's the one thing: depending on the lender's opinion and how well your finances appear, the land loan might either be secured or unsecured. ## Types of Land Loans in Canada There are different types of land loans available in Canada. The most popular land loans are: ### **1. Raw or Vacant Land Loan** If you want to buy a piece of land but it lacks infrastructure. This is where a raw land loan comes in. This loan type is primarily used to purchase undeveloped land with no plans or infrastructure. However, these loans are difficult to obtain because they carry a higher risk for the lenders because the land is more difficult to sell and conveys no pay. As a result, you'll almost certainly have to pay higher interest rates and make a larger down payment. ### **2. Serviced Land Loan or Lot Loan** A serviced land loan is used to buy land with infrastructure such as electricity, water, and sewer. This type of loan is considered safer by lenders because it has some value and pay generation potential. As a result, serviced land loans may come with lower interest rates and a smaller [down payment requirements](https://getnewhouse.ca/article/how-much-down-payment-expected-for-land-ontario-canada). ### **3. Farm Land Loan or Agricultural Loan** A farm land loan is used to purchase agricultural land, similar to a farm or ranch. This sort of loan is planned specifically for farmers and ranchers, and it can assist them with financing the purchase of farmland, hardware, and livestock. Farm land loans may accompany lower interest rates and down payment prerequisites as they are backed by the value of the farmland and the pay generated by farming. ### **4. Commercial Land Loan** A commercial land loan is considered when we plan to buy land for commercial purposes, for example, building an office or retail space. This type of loan can assist business people with financing the purchase of land and development costs. Commercial land loans may comes with lower interest rates and down payment prerequisites as they are backed by the pay generated by the business. ## How to Qualify for a Land Loan in Canada? Qualifying for a land loan in Canada can be more challenging than qualifying for a mortgage. Lenders consider land loans riskier as they are not backed by a physical plan that can generate pay. To qualify for a land loan, you may have to meet certain prerequisites, including: - **Good Credit Score** Having a good credit score is important while applying for a land loan. Lenders want to guarantee that you have a good track record of paying back obligations on time. - **Adequate Income** Lenders want to see that you have a stable pay and can afford the loan payments. They may anticipate that you should give proof of pay, for example, pay stubs or tax returns. - **Down Payment** Lenders may require a higher down payment for a land loan than a mortgage. A down payment of 20% or more may be supposed to get the loan. - **Land Appraisal** Lenders may require an appraisal of the land to guarantee that it is worth the loan amount. They may also want to know the potential for cash generating activities on the land. - **Collateral** Lenders may require collateral to secure the loan. This could incorporate other property or assets that you own. ## Where to Get a Land Loan in Canada? There are lot of ways and options for getting a land loan in Canada. Yet, the most popular are- ### 1. Banks and Credit Unions In Canada, the most popular options of land loans are banks and credit unions. Banks and credit unions offer a variety of land loan options and generally have explicit and strict requirements for credit scores, down payments, and different criteria that borrowers should meet to qualify for a loan. ### 2. Private Lenders Another choice for land loans in Canada is to work with a private moneylender. Private lenders are individuals or companies that give loans without being part of a traditional financial institution. They typically have less restrictions and can be more adaptable with loan terms, however may charge higher interest rates to reduce the risk. **Note** : While working with a private moneylender, it is important to take care of any outstanding concerns and research the bank to guarantee they are legitimate and reputable. You ought to also carefully audit the loan terms and understand the expenses and interest rates before agreeing to the loan. ## Land Loan Considerations Before taking out a land loan, there are a couple of key considerations to remember, as it's the loan who drags towards the debt trap. So, you must know - - **Purpose of the Land** It is important to think about the reason for the land before taking out a loan. In the event that the land is for personal use or a small leisure activity farm, you may not require as much financing as you would for a large-scale development project. - **Down Payment** Many lenders require a down payment of at least 20% for land loans. This can be a significant amount, so it is important to factor this into your budget while considering a land purchase. - **Interest Rates** Interest rates for land loans can vary generally depends upon the moneylender, the loan term, and your credit history. It is important to look around and compare rates to guarantee you are getting the most ideal deal. - **Loan Terms** Loan terms for land loans can range from a couple of years to several decades. It is important to carefully audit the loan terms and guarantee you understand the repayment plan and any charges associated with the loan. ## Land Loan Options in Canada Land loans can be a great choice for individuals and organizations hoping to purchase land in Canada. Whether you pick a traditional moneylender, a private bank, or a government-backed loan, it is important to carefully think about your options and pick the loan that best fits your requirements. Before taking out a loan, it is important to carefully survey the loan terms, think about the reason for the land, factor in any down payments or charges, and guarantee you are getting the most ideal interest rate. With these factors as a top priority, you can make an informed decision and find the financing you really want to purchase your dream property.

Which is the most overpriced housing market in Ontario, Canada?

Canada has one of the vast and most upscale housing markets in the world. The demand for housing in Canada has increased significantly over the past few years due to a variety of factors, including immigration, interest rates, and an increase in foreign investment. However, when people perceive a lack of housing options in the city they want, it frequently leads to bidding wars for homes and an increase in the price of the housing market. So, today we will see the most overpriced housing market in Ontario, Canada. ## The Most Overpriced Housing Market in Ontario, Canada The pandemic caused a significant rise in housing costs across the board in Canada, from suburban communities to urban developments. However, the recent increase in interest rates has resulted in a drop in the housing market that ranges from 2% to 9% across different cities. But still there were are some parts of Ontario city where housing market has seen increase. According to Moody's Analytics, **South Ontario, particularly the Peterborough has the most overpriced housing market** in the entire province of Ontario. The average household income in Peterborough, according to Moody's analysis, is about $70,000 per year, so a mortgage of about $300,000 can only be approved for the average resident. This prevents many locals from achieving their dream of home ownership by making purchases in their own city. ## Most Overpriced Housing Market in Ontario, Canada The housing market in Southern Ontario, particularly Peterborough, has been dubbed the most overvalued in Canada. Additionally, the Niagara region, Windsor, Hamilton, and London are also among the most overpriced housing markets in Ontario. However, according to many brokers and agents believe that 60% of Canada's regions are anticipated to have balanced markets in 2023. The most significant price drops are anticipated in Ontario and Western Canada, where some markets may see average residential sale prices drop by 10% to 15%. Let's see how the rising mortgage interest rates and the lack of supply will drive the dynamic housing market in Ontario, Canada. What do you think? Do you have any other names to add in the list of most expensive Canadian real estate market? Feel free to share your views.

Will house prices drop in Toronto in Ontario, Canada?

As we enter 2023, the Canadian housing market keeps on chilling off and adjust. Recent data shows that typical home prices in Ontario have decreased by 20% year-over-year, coming to $798,835. Greater prominent Toronto Area home prices have decreased by 18% year-over-year to $1.10M, while the City of Toronto has seen a 12% decrease year-over-year to $1.07M. Numerous homeowners and prospective buyers are contemplating whether this pattern will go on into 2023. Specifically, there is much speculation about whether house prices in Toronto and Ontario will drop, and provided that this is true, by how much. ## Will house prices drop in Toronto in Ontario, Canada? Despite the significant decrease in home prices, two banks, Desjardins and TD Economics, predicted an extra drop by the end of 2023, especially in provinces other than Ontario. However, house prices in Toronto and Vancouver, which were front runners in the recent house price boom, are also expected to continue dropping. As per report by Reuters, **a 15% drop in Toronto and a 12% drop in Vancouver is normal in 2023.** ## Factors Adding to the Drop in Prices **The decrease in home prices is essentially because of many factors, including high interest rates, declining demand, and oversupply**. As we already mentioned, high interest and mortgage rates have reduced demand, with fewer buyers in the market. This trend is expected to continue in 2023, putting further pressure on prices. This presents the both opportunities and challenges for home buyers and sellers, with buyers possibly finding it more reasonable to enter the market, while sellers might confront hardships selling their homes. To explore the market effectively, it's necessary for the two buyers and sellers to remain informed and settle on informed choices. Moreover, oversupply in certain markets has additionally added to the decrease in prices. As additional sellers enter the market, there are less buyers to satisfy the need, prompting a decrease in prices. ## Prices drop in Toronto in Ontario, Canada As we enter 2023, the Canadian housing market keeps on encountering a huge decrease in home prices. While it stays hazy how much further prices will drop, yet the present status of the Canadian housing market demonstrates that we can expect a proceeded with decrease in home prices all through 2023.

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. **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.

Can a non-resident get a mortgage to purchase a house in Canada?

The Canadian real estate market is open to both residents of Canada and non-citizens who reside abroad. There are no restrictions on the kind or quantity of real estate that may be bought in Canada. As a result, a lot of people are interested in buying real estate in Canada but are unable to do so due to a lack of available funds because buying a home or piece of property can be very expensive. Therefore, the majority of people require bank financing or a mortgage in order to buy a piece of land or a house. So, today will determine whether a non-resident can get a mortgage to buy a home in Canada or not. ## Can a non-resident get a mortgage to buy a house in Canada? Yes, non-residents who want to purchase a home in Canada can apply for a mortgage there. Although the interest rates are very similar, Canadian banks frequently demand a larger down payment from non-residents than they do from residents. A **minimum of 35% of the home's value is typically required as a down payment** but these requirements may differ from bank to bank, with some being stricter than others. However, in addition to the down payment, non-residents will often have to show the following as well: - Employment verification letter (including income verification) - Bank statements as proof of deposit(at least three months) - Six months of financial statements or an international credit bureau report - A Canadian bank account from which mortgage payments can be made. There are several other lenders that offer mortgages. These lenders can offer a mortgage of up to 65% of the property’s value. You will also need a reference letter from your bank, bank statements for the previous three months, credit information, and tax returns to prove your ability to pay the mortgage. Additionally, these different lenders may offer comparable products with different interest rates and terms. To make sure you're getting the best mortgage product for your needs, speak with several lenders. Canada has substantial expat communities as well as many foreigners that visit for vacations, employment, or study for a short time. Anyone can purchase real estate in Canada, whether they are a citizen, a resident, or a non-resident. This means that you will be able to purchase land in Canada even if you are a non-resident who resides permanently in another nation. But a frequent query that many individuals have is whether they must travel to Canada in order to purchase real estate while they are non-residents. So today we'll find out if you have to be physically present in Canada to purchase a property or not. ## Being a Non-resident, do I need to come to Canada to buy a property? There are no restrictions on non-resident investors buying real estate or businesses in Canada. You are thus free to buy houses, businesses, commercial properties, or agricultural land. There is no requirement for residency or even physical presence in Canada. You can, in fact, look for properties online from anywhere in the world, work with an agent to do so, and even make a purchase. However, you will need to travel to Canada at least twice if you want to buy a property there. The first time is to open a Canadian bank account so you can get Canadian financing. The second time is to sign all of the necessary paperwork. Foreign homebuyers are not permitted to grant powers of attorney for the purpose of remotely signing real estate documents. **Important:** Until recently, anyone could purchase real estate in Canada. But, after the introduction of Foreign Home Buyer Ban effective from January 2023 any non-permanent residents and non-citizens won't be allowed to purchase residential property for a period of 2 years. ## Do you need to come to Canada to buy a property? You can virtually anywhere in the world see a property online or by working with an agent to do so, and even make a purchase. However, there are specific phases of this process where you'll need to visit Canada, such as when you have to open a bank account, which, as we previously stated, is required for the purchase of real estate. ## Non-resident can get a mortgage to purchase a house in Canada Yes, non-residents can get a mortgage in Canada to finance the purchase of a home in Canada. And as far as mortgage interest rates go, both Canadians and non-residents are subject to the same rates as long as they meet the requirements for mortgage eligibility.

Is Pickering in Ontario (Canada) a Good Place to Live?

Have you heard of Pickering, a beautiful city located in Southern Ontario? Are you looking for a new house? Are you thinking, **Is Pickering (Ontario) a good place to live?** Is it safe to move in? What are the pros and cons of living in sub-urban cities? Let's get answers to your queries. Pickering (Southern Ontario) ---------------------------- Pickering is a unique city to settle down in Southern Ontario. It is primarily a residential community, family-friendly with parks, cultural attractions, and great outdoor recreation opportunities. Are you considering moving to Pickering or debating a different city in Ontario? It is essential to look at what the city entails. Pickering was officially incorporated in 2000. There were over 90,000 residents, according to the 2016 census. It offers features of an enormous city, scenery, amenities, and a strong sense of community while maintaining a small-town feel. Its proximity and easy access to Toronto while ensuring a slower-paced lifestyle make many people consider moving to this idyllic area. Languages such as Chinese, Japanese, Spanish, and Arabic are also spoken around the town, although the majority still speak English. Don't miss to explore Ajax, another beautiful city in Southern Ontario and also know if [**Ajax is a good place to live**](https://getnewhouse.ca/blog/is-ajax-in-ontario-good-place-to-live-canada/). Pickering Lifestyle ------------------- Pickering is perfect for people wanting to provide their families with a suburban lifestyle. It offers anything a large city will have such as **recreation centers, shopping malls, community events**, and many more. It is also a major attraction for those who wish to escape the concrete jungle. The city center has over 200 shops, including Sears and The Bay. So you can spend your afternoon shopping in a quiet, suburban community. Your kids are also safe, and you get to do any activity you love doing when living in the city. Pickering's strong sense of community is also one of the many things that draw people to it. The city has a wide range of cultural and art events. These allow the people to view and participate in exhibits, shows, and theatre. The **Pickering Museum Village** also shows the pride of the community while offering a glimpse back at those who came before. The city has theatres while ensuring the love of arts and culture stays alive with music from local talent. Enjoying nature comes by itself for those living in this city. It has hectares of open space, beautiful parks, waterfront, and beach area. Your children can enjoy their evening at the lakeside splash pad while you enjoy the unique boutiques, restaurants, and live music. The city's breathtaking scenery gives a mind-blowing experience while taking a quiet stroll through nature. Connect with nature without leaving the comfort of your city. Housing in Pickering -------------------- Pickering is one of the most affordable cities out of the 23 regions of the Greater Toronto Area. The average housing price in Pickering is around $1.1 million, which is affordable compared to other cities. However, the hot housing market seems to have cooled off a bit! Let's see will the [**housing market crash in Ontario**](https://getnewhouse.ca/blog/will-housing-market-crash-in-canada-reasons/) or its just a little price correction of the overpriced real estate industry! The Province of Ontario has also designated Pickering as an urban growth center to receive more development allowances and population. There are several areas where you can choose to live in. Places like **Claremont** are best if you are interested in stepping back from city life and having a rural feel. **The Frenchman Bay area** is perfect for people that enjoy staying in the city. Smack dab is also a stone's throw from transportation, dining, shopping, and other modern activities. Amberlea, Duffin Heights, and Rosebank offer a more traditional, suburban setting to settle down and raise a family. _Do you know about any other good to go places in this city?_ Education in Pickering ---------------------- The education offered in Pickering will set your children up for success no matter your choice of the school board. The schools are excellent and fall nothing short of providing the best schools your children need The Durham District School Board, Durham Catholic District School Board, and others have schools operating in the city. Institutes like Blaisdale Montessori School and Durham College/Centennial College have several complementary courses and classes. There are also private schools like Pickering Christian School and Wasdell Academy. Additionally, the University of Toronto is just a few kilometers from Pickering. Pros of Living in Pickering --------------------------- Here are some of the advantages of moving to a sub-urban city with a relatively less population and open spaces: ### 1\. Convenient and Affordable Pickering has access to major freeways and is close to big cities, making it a great option for commuters. It is also a top choice for people who want to find higher-paying jobs at corporations. Other cities within a short commuting distance include Whitby, Brampton, and Aurora. Anyone who knows about housing in Canada knows cities close to the Greater Toronto Area are super expensive. But Pickering is more affordable than other parts of the GTA. The median price of a house in Toronto is much higher than its suburbs. However, the cost of a house in Pickering is still affordable. So, Pickering is a good choice if you want to live in this region. With that said, prices have risen in recent years and are likely to continue to do so. ### 2\. Better Outdoor Recreation Pickering is located on the shores of Lake Ontario, creating excellent outdoor recreation activities. Being able to explore the lakefront at its perks is a phenomenal experience. Some properties also allow people to rent surfboards and head out onto the water. Pickering is also an excellent city for cycling, biking, and hiking trails. You can also go to Frenchman’s Bay Harbour to see the boats at the dock and walk around the marina near the water to enjoy its natural beauty. Other recreation activities include boating, sailing, and swimming. ### 3\. Excellent Arts and Culture Pickering is a great place to know cultures and have fun. This city, one of the [**best Toronto suburbs**](https://getnewhouse.ca/blog/10-best-toronto-suburbs-for-families-to-live-and-grow) has several excellent arts and culture initiatives. The city hosts events throughout the year like Arts Unleashed and Culture Days to celebrate arts and culture. The Pickering Museum Village also helps preserve its history, allowing trips for students and teachers. The residents and guests can also learn about the history of Pickering. ### 4\. Better Employment Opportunity Living in Pickering provides good job prospects. Pickering Nuclear Generating Station has the largest employer with more than 4,5000 employees. Other major employers in Pickering include Rogers Communication, Norinco Manufacturing, Purdue Pharma Canada, and Signature Aluminum Canada Inc. etc. Not only this, Pickering's proximity to Toronto allows residents to maximize their job prospects by looking for work in the city. Also, don't miss to learn [**7 Reasons to Live in Stoney Creek, Ontario, Canada**](https://getnewhouse.ca/blog/reasons-to-live-in-stoney-creek-ontario-canada/) Is Pickering a good place to live? ---------------------------------- So, what can you conclude after analyzing the pros of living in this sub-urban city of Ontario. Pickering is a good place to live and one of the preferred [**Ontario cities**](https://getnewhouse.ca/blog/top-10-best-cities-to-live-in-ontario-canada) with great outdoor recreation, and employment opportunities. There is also quick access to Toronto, and generally affordable housing for the region. What more to look for? If you are staying in Pickering or planning to move there, let us know is it a good place to live. Do share your experiences and suggestions. And what do you prefer, detached or semis, or [**pre-construction or new construction**](https://getnewhouse.ca/blog/is-new-construction-good-investment-property-ontario-canada/) condo units? Whichever you choose, take a wise decision.