INCREASING RATES IN CANADA REAL ESTATE: According to a Toronto based Real Estatae Broker, Real Estate Investors are the not only end users left who have been sidelined in the housing market by increase in interest rates, Real Estate Investors are being depressed from ease of properties.
Nasam Ali, One Group Founder and Broker said in an interview that a decision has been taken by Bank of Canada in which it will increase its benchmark rate by 3 quarters to 3.25% of a point. All of this increase in rate has stopped investors from investing in Canada. There is a huge number of people who are frustrated with the amount of investment and speculation which is presently going on in Toronto Real Estate.
As purchasing plans of investors are there on ice, and most of them are not selling in this real estate market. She also said that this is happening instead of choosing properties to rent out until the recovery of home prices.
As the Canada Rental market has heartened up, on the other side Canadian home sale market has a steep decline, which in return rose the rate. Urbanation, a Research Firm reported that price of condo rental in GTA (Greater Toronto Area) has hit record on an average in the second quarter of year of around $2,533/month.
Ali said that Investors are paying a lot of money out of their pockets because of high rates of interest, which is not making any sense to think of buying something right now. A huge number of investors are just waiting for the right time to come for them to invest in.
The Bank of Canada released a data/report in January in which it was found that investors accounted for the 1/5th of homes which were bought in 2014.
Ali also said that there are some buyers who are determined to buy a home, whereas most of them are waiting for the rate of interest to stabilize.
“There are a lot of buyers who are eagerly waiting on the sidelines and this is not just the only thing which is going on and makes them wait for a longer period to take a move. Also on the other hand, there are some people who are waiting for the rate of interest to stop from increasing and then they will plan to take a move”
Ali suggested to all those buyers who are choosing to buy now to stay within the lower end of the buying budget to account for high borrowing rates down the road.