It is not too late, however, to invest in real estate
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The pandemic may have been our focus for the past year and a half, but for anyone in Canada considering entering the housing market, there’s been another crisis brewing. In the first quarter of 2021, the cost of a single-family home in Canada rose 14.1 per cent year-over-year, this following a year of already unprecedented demand for homes, and month after month of record-setting sales and price appreciation. Will this housing bubble ever burst? Not likely in the near future, but there has been a glimmer of hope recently that the market is slowing down. That’s not to say that prices aren’t still on an upward swing, and for those of you still considering real estate as an investment, it’s not too late.
2020 was a very good year
Well, at least from a home seller’s point of view. Bidding wars and subject-free, over-asking offers became the norm. And those offers were not just a little over asking. In urban centres homes went for hundreds of thousands of dollars above list price. But the big cities were not the only ones experiencing the frenzy. Homes in small towns across the country also were going for never-before-seen prices. Great for the seller — not so much for the buyer.
So … just when will this bubble burst?
Of course, no one can predict the future with true accuracy, but the general consensus appears to be that the market will continue to be strong for the remainder of this year, but will slow down in 2022. A number of factors will be in play to make this happen, not the least of which will be rising interest rates. It seems that Canadians are even open to raising the cost of borrowing if it means a cooling of the market.