"Knowlege is power. Flexibility is key." 🔑
The road to buying a house in Canada is one that a whole lot of people are striving to get on. But, with the ever-rising cost of real estate in Canada, it is becoming harder and harder for first-time homebuyers to get their foot in the door.
It pretty much goes without saying that housing costs are at an all-time high and the future of real estate in Canada is uncertain.
So, to understand more about how folks should go about the Canadian housing market as first-time buyers, Narcity spoke to Trish MacKenzie, a housing expert and realtor about what she thinks first-timers should consider.
Have a good support team
"My advice to homebuyers now, yesterday and tomorrow, is to make sure you have the right team supporting you," said MacKenzie.
She points out that having a knowledgeable realtor, and lender, can unlock a whole lot of buying power you didn't know you had before.
"Interview potential agents and lenders to work with to ensure their expertise and approach aligns with your goals as a buyer or seller," she added.
Start preparing now
Setting yourself up for homeownership can also mean preparing yourself even though you don't plan on buying a home for the next few years.
"Start the conversation now to get set up with programs," explained MacKenzie. "Like the new FHSA [First-Home Savings Account] plan, so you have more buying power behind you when that perfect place comes up."
There are tons of things that the average person cannot control when it comes to the housing market and the biggest is supply and its effect on prices.
While housing supply is something that the government is trying to address, it isn't the only thing that is a major factor in the housing market.
"The difficulty for first-time buyers is the lack of entry-level inventory within major city centres," said MacKenzie.
She also explained that to help curb housing prices, the government should encourage smaller cities and towns to grow.
Pointing out that the richer, more established buyers who may have families are able to buy up expensive housing within cities, MacKenzie does predict that there could be a shift for those buyers to opt for homes with more space outside of urban centres.
"[This is] part of why the government should be encouraging smaller cities and towns to expand."
Along with that, MacKenzie also pointed out that, ultimately, if you're ready to make moves towards homeownership, there's no time like the present.
"The reality of our market, even with the crash in the '80s and in '09, is that over time, the value of real estate increases, and increases at a rate higher than average household income," affirmed the realtor.
And with things like the mortgage stress test and the introduction of a requirement that lenders need to provide you with a six-month mortgage payment deferral in times of financial hardship, understanding how much you can afford is a little bit easier now.
"It's important to know what you can afford, and stay within your means."
Rethink what it means to buy a house
Finally, it's important to rethink how you approach housing overall. While yes, your home is a place to live, grow and feel safe in, they "are also tools to add additional wealth to your portfolio — in turn, increasing your buying power in the future."
"So, while what you can afford right now may not be the dream house, it is a step towards the final goal," reminded the realtor.
"Knowledge is power. Flexibility is key."
With this knowledge, hopefully, you can navigate the current crazy world of housing, especially as it continues to morph and shift over the next five years.
This article’s cover image was used for illustrative purposes only.