Aurora Real Estate News

How to ignore all the consistent real estate-related headlines that are popping up these days you got headlines like this thing home prices to drop you report index and even Toronto won't be immune and immigration shortfalls from covid-19 May spell short-term gain the long-term pain for housing market in Toronto are ghosting sellers so they're just not responding even after they've submitted an offer and for a lot of younger adults Millennials this feels like the moment they've been waiting for it's not a secret that in many markets in Canada the home prices have been going crazy and most of the past few years we've seen consistent increases in home prices in for a lot of people have been discouraging thinking on that market keeps on going up I'm never going to be able to buy a home so when headlines like this come out people start thinking oh my gosh this could be the crash that I've been waiting for it to finally get in but despite all this negative information we keep on seeing the prices go up in most markets in Canada and today's video we're going to cover exactly why the market behaving in the way it is if there's going to be a crash in 2021 and what you can do if you're in the place that you're thinking about buying soon but before we dive right into it if you're new to the channel hey how's it going it's nice to meet you my name is Tammy Andreakos and I post videos about Canadians and their money the overall goal is to get information to Canadians as quickly as possible and as accurately as possible so that they can set themselves up to live a more financially stable future anytime there's any news or updates that could affect you and your family's money you're going to hear about it here first if any of that sounds interesting to you make sure to hit the Subscribe button and the notification Bell and while you're down there hit that like button and turn it blue because when you do hundreds of people who wouldn't otherwise seen this video get to see it and it could be information that they're looking for thanks so much for doing that now let's dive into exactly what's happening here when it comes to the Canadian real estate market there are two areas that you can take a look at Aurora Real Estate. New Market Real Estate. Richmond Hill Real Estate. Bradford Real Estate. East Gwillimbury Real Estate, Oak Ridges Real Estate, King City Real Estate. Luxury Real Estate.

 

first you can look at the national perspective discovers all of the areas that would affect the entire country this could include changes like interest rate numbers or the job status in Canada or maybe even immigration targets that we've been putting into place these are all things that are going to affect the economy and as a result affect the housing market everywhere in the country then you can narrow it down a little bit more to each individual local market based on a number of factors for that individual local market you can see something different than the overall Canadian Outlook but let's start with a quick look at the national perspective in what things are changing that could be having an effect on the market the first major factor that affects everyone in Canada is where the current interest rates are you probably already know that one most Canadians buy a house they're doing so with a mortgage the bank is lending the money to buy the house and they're charging an interest rate on this money so they can make a little bit of a prophet Wendy's interest rates are high people's monthly mortgage payments go up and of course the inverse of that when the interest rates are low those monthly payments go down so as a result if interest rates go up then you can afford less home because your payments will be higher and their way you're qualified for the mortgage in the first place is what you could feasibly pay on a month-by-month basis for your mortgage and if rates go down then that lowers your monthly payment allowing you to buy a more expensive house because of the way that you're qualified for that mortgage because of this it makes sense that when interest rates go up we see the less home sales and when interest rates go down we see more as interest rates lower people who wouldn't have otherwise been able to afford a home in their markets are now able to and they're added to the buyer pool because real estate worth call other markets in the supply-and-demand sort of way when you add more demanding more buyers and there's the same amount of Supply that's going to drive prices up that's why it's so important to look at interest rates in a time like this to sort of forecast what's going to happen in the market and who controls what does interest rates are that's the Bank of Canada and I'm simplifying it a little bit but essentially the Bank of Canada goes out and tells all the other Banks like your RBC to CIBC is your they say to them hey we want you to lend money at this rate for the next little while then those Banks pass on that right to the consumer in multiple different products whether it's a mortgage or a high interest savings account or various other accounts that would pay interest so when the global Health crisis hit the Bank of Canada lowered its rates and lowered its rates and lowered its rates them or their idea is that when they lower the rate that stimulates the economy because it encourages more people to borrow money in to spend it in to consistently use it and move it around so we need to look at what's going to happen with these interest rates in the future if the interest rates go up then we could see a huge fall in house prices but if they stay the same at their current low rate we're probably going to see it stay the same but recently on October 28th the Bank of Canada announced that it was planning to keep its interest rates near zero until 2023 and they made that decision based on the assumptions that there won't be any more widespread lockdown and that there will be a vaccine by 2022 so this is some very important information to have because from what we know about interest rates when they keep them low and increases the amount of people trying to buy and buying into the market so we could expect to see prices stay the same but interest rates aren't the only thing that affect the national real estate Aurora Real Estate. New Market Real Estate. Richmond Hill Real Estate. Bradford Real Estate. East Gwillimbury Real Estate, Oak Ridges Real Estate, King City Real Estate. Luxury Real Estate.

 

Outlook low interest rates don't mean much if people are unemployed aren't working and as a result can't afford a mortgage this is one of the things I hear most consistently how is this increase unemployment in Canada going to affect the real estate market we all know that when covid-19 many people were out of work or were laid off and if this higher unemployment work to have continued maybe there would have been a decrease in prices be carpool in that supply and demand balance would be offset so let's take a look at this Canadian unemployment rate and see what's happened so this was all pre covid we go over here and a hot now this is getting tomorrow and then to April and we see a quick Spike and unemployment rate it seems like we maxed out so far at 13.7% although we have been seeing the Canadian job market recover more quickly than was originally expected since that Peak and Nate were down almost 5% from the worst case scenario that was that last current Peak now if there are no more huge lockdown we could see further recovery in this chart going down and down and down further back to our original levels of that 5.5 5.6% so this is an area that was really going to depend on what happens with the Cove it to do a shin in the second wave that we're starting to see if that unemployment rate goes down that could increase home prices but if we see it Spike back up it could have a negative impact on the home prices lowering them down even further and somehow oh my heart just slipped down and hit the floor and shattered glass so I'm going to clean that up and I just wanted to tell you why there wasn't there anymore okay now that that mess is cleaned up I guess I'll just okay so we're worried that's right it was unemployment rates unemployment rates and interest rates aren't the only thing that affect supply and demand on a national level though another Big Driver of the supply and demand relationship is immigration into the country as population increases in any way be an immigration or a natural population growth we're going to see home prices increase as more and more people need a place to live and historically Canada has had relatively High immigration rates now this immigration conversation does affect different areas of the country differently areas that seem more immigrants settling down in the areas such as Toronto are going to see more of an effect from this in terms of increased home prices but with covid how is immigration going to change in 2020 we've seen a decrease in the amount of immigration in Canada this is largely due to the Border restrictions travel restrictions that have been placed everywhere in the world due to the global Health crisis but the government announce on October 30th of that they plan to bring in more than 1.2 million immigrants in the next three years and of course some people are saying that these sort of targets aren't really realistic because of the Border closures they're still ongoing and it kind of assumed that they're going to open up more was take a listen to what the immigration Minister for the government says to see if he has any more information so secret that the pandemic is made moving around the world a lot harder we hope that we will be at least that half of our overall Target for 2020 and up we look forward to making up for lost time going for it I will hope to bring in about 700,000 immigrants over the next couple of years now it went by 10 extra fifty thousand in each of the next three years wow okay so that's a good chart let's let's pause on that as opposed to these numbers which were the plan before the pandemic now and then you let it go for $50,000 that was going see in the future so that's a pretty significant increase in Immigration this could certainly Aurora Real Estate. New Market Real Estate. Richmond Hill Real Estate. Bradford Real Estate. East Gwillimbury Real Estate, Oak Ridges Real Estate, King City Real Estate. Luxury Real Estate. 

result in a increase in demand especially in those major metropolitan areas but at that point we're getting a little bit farther away from the national perspective so now seems like a good time to jump in to the local perspective and how that can affect individual markets has had a dramatic effect on a lot of different markets across the country and again it's all controlled by this basic supply-and-demand one major factor that can affect local markets is that City's rent price the reason rent so heavily affect home prices is it because of investors when investors buy a property it's very intense to make some money on it if rent is high they'll have enough money to cover the mortgage and to cover all of the other expenses that go along with owning a property but on the flip side as rent goes down they could pass that threshold of breaking even ended up having to put money in every month to their property instead of making money on it this causes a lot of investors to panic because when they're not making money it's not really a good investment so we'll see an increase number of investors trying to sell off the property when rent numbers go below that threshold running Goose moment there is a Mad Russian America Apple Amazon Facebook business more Rental. CA which is a great website for getting stats on rental numbers across Canada we see that for their October 2020 rent report they're going to tell us about September they say that it was an average of $1,769 per month and that down 9.5% annually and the average rent has been nearly identical over the last 4 months between 1769 and 1771 despite that right sort of averaging out over the past few months this is 10% decrease could have a huge effect on certain markets we're seeing a large decrease in rent in areas that are heavily supported by schools as more and more universities and colleges transfer to an entirely digital curriculum it'll mean that less and less people need to be renting in the city that they're going to school in as an example its look at the downtown Toronto Market this has been the perfect storm for downtown Toronto condos to go down in value schools and gun digital so there's less people studying at the universities in town plus we're seeing an influx of more more people leaving the city they no longer need to be downtown to work because they're not working in person anymore they're just calling in on Zoom when they need to I mean just take a look at this chart this is something from the Toronto real estate board they gave us his dad on over 200 different home sales and you can see these arrows there they're marking where people are moving from Toronto so you can see this vast number of arrows pointing out and away from the city and that indicates that more people are moving away with people able to work from home and more reasonable prices just outside in that outer ring of the city it's starting to make sense for people to sell downtown and move to the outer ring as a result we've seen homes and properties in the downtown core that used to be so expensive dropping in value while the outside communities like the Durham region or Oakville or DeSoto areas that are a little bit removed from the downtown core we're seeing those prices increased dramatically so these type of local effects happen to each individual Community definitely going even further than that it's not just a migration away from the city's that's causing different changing local market conditions we talked about how unemployment is going down across Canada on a national level but this doesn't speak to the individual little markets that are seeing increased unemployment still for example many Aurora Real Estate. New Market Real Estate. Richmond Hill Real Estate. Bradford Real Estate. East Gwillimbury Real Estate, Oak Ridges Real Estate, King City Real Estate. Luxury Real Estate. 

markets in Alberta like Calgary where there's a higher unemployment number or seeing drastic decreases in the prices of their homes since this area is economy is so heavily based on the oil and energy industry and that industry hasn't been doing so well we're seeing a decrease in home prices because of that increased unemployment from those struggling Industries this just goes to show that you can look at National stats all he wants but when it comes down to it your individual local market is going to be different from every other local market in Canada so if you want to get a good idea of what the Market's going to do in your area your best place to start is on that local markets and taking a look at all the things we've talked about and then considering the national changes like the interest rates and immigration rates and national unemployment and using that to sort of augment what you find when you're looking at your individual market so will there be a huge market crash in 2021 the truth is nobody knows for sure I wish I had some sort of magic crystal ball that I could look into it and let you know exactly what's going to happen but the best we can do is take a look at these stats and take a look at this information and try to come to our best educated guess but all of these. And all of these numbers are far less important than actually following the fundamentals when you decide to buy a home if you buy a house that you can afford and you're buying it for the long term I think it's a good time to buy always there are so many people who have money in their hands are waiting on the sidelines to jump in when the market crashes but if they'd never see the market crash that they were looking for they're just missing out on years and years of owning a home in potentially seeing it appreciate but if you're buying a home where the numbers make sense and you can afford it and you have the income to afford it and you have a large emergency fund ready in case you lose your job then it makes sense to buy now and as long as you're holding for the long-term 10 years plus then you should be able to weather any storm that the market throws at you and if you want to be even more safe and even more efficient about it I really recommend taking a look at a home that you can use to generate some income additionally this is the strategy that I use where I live in one portion of my house and I rent out the rest of it and that helps me dramatically with my mortgage payment and increases the amount I have to spend on myself monthly by huge amount if my house dropped 30% in value tomorrow I would be fine because I know that I can make enough money to make that mortgage payment each and every month and I can hold on to it long enough to wait out the storm plus because I'm taking is aggressive approach at reducing my living expenses I'm able to invest off far higher percentage of my income but that's getting into a topic for another day Aurora Real Estate. New Market Real Estate. Richmond Hill Real Estate. Bradford Real Estate. East Gwillimbury Real Estate, Oak Ridges Real Estate, King City Real Estate. Luxury Real Estate.