The trading pattern in Canada has taken a different turn especially for those in the real estate industry. The normal routine had been having a good career, get a sizable house, start a family and life goes on smoothly.
Now things are not so rosy as before in Canada’s hottest market. The rate at which house prices have gone up has changed the trade setting completely.
Vancouver and Toronto rising prices have made buyers have second thoughts about buying a house.
It has come to public notice that there has been a massive decrease in the sales of properties across the industry. The rate at which sellers are increasing prices seems like they are not planning to buy more houses.
This situation also restricts the demand for houses while the supply for houses also goes to a standstill.
Sales can only be made when there is demand for properties. But with high prices few people are buying houses which also greatly affect supply.
Toronto chief economist Beata Caranci expressed that “But despite strong appreciation in the price of your home, trading up still requires a hefty mortgage or reduction in savings.”
If sellers on the other hand, are still reluctant to reduce the prices of their properties, buyers will be left with no option but to wait till a reduction occurs.
First-time buyers also find it difficult to buy a house when prices are high. Down payments cannot be afforded and those living in reasonable houses are not showing any sign of moving out anytime soon.
This raises the question… What will happen to all the buyers waiting for prices to drop? Will there be enough houses to supply when prices drop? This will lead to the situation in which many people will be chasing few properties.
Canadians are left with only one option for the time being and it is renting. Renting a property is the only realistic option that Canadians have at this point in time.
Caranci went on to say “Renting is not a bad idea on this front.”
However, when mortgages cannot be afforded, there is no need to go in for a house that cannot be paid for at the end of the day.