The TanTeam’s 2023 Q4 Real Estate Radar: Let’s Talk!

The last quarter of 2023 is shaping itself into an interesting time for real estate market go-ers and here is the latest bite sized updates:

Bank of Canada Keeps Overnight Rate Stable: On September 6th, the Bank of Canada announced its decision to hold its overnight rate steady. This move, combined with the current higher-than-average listings on the market, sets the stage for an anticipated and busy last quarter of the year.

Sales Activity on the Rise: Following the Labour Day holiday, we have witnessed a notable uptick in sales activity. Home prices remain steady, although some areas are moving quicker than others. This presents a prime opportunity for those considering trading up by transferring their existing low-rate mortgages or smart-sizing to another home to create a more comfortable financial situation without sacrificing much.

Mortgages – Unlock Your Financial Options: If you purchased your property before the 2nd quarter of 2022, you may have secured historically low mortgage rates of 2.79% for a 1-year fixed or 2.15% for a variable rate. Now, you might be feeling some financial pressure. Don’t worry; there are solutions:

• Consider refinancing, selling, or renting out your current property and explore more affordable options, perhaps with a secondary unit.
• If you locked in at the lowest rate with a 5-year term, you can “move up” by making up the difference with additional cash or by “extending and blending” your mortgage. This means you extend your initial term or longer and pay the current rate on the additional borrowed money, ensuring you still enjoy a great rate with more house than you could have afforded a couple of years ago.

Landlords – Navigate Rent Control Challenges: For residential landlords with properties built before November 15th, 2018, subject to rent control in Ontario, we understand the growing gap between current rent and market rates may be a concern. Here are some trends to consider:

• Some landlords are selling and reinvesting in properties where they can charge market rent.
• Others are opting to move into their investment properties or have immediate family members do so.
• In cases where properties are held in corporations, selling and buying anew becomes a viable option such as a “property swap”

Residential Tenants – Be Informed and Proactive: Tenants, it’s essential to stay informed and proactive in this dynamic market. If you’re paying substantially under market rent, be aware that you run a higher risk of having to move. Here’s why:

• Landlords aim to keep up with current market rates.
• Independent landlords can give notice and move in.
• Both independent and corporate landlords can choose to sell.
• Investor buyers prefer properties with rental income closer to market rent which means you might need to move out.

If paying closer to market rent isn’t an option, consider your long-term housing plans. Buying may be a viable solution. You could explore purchasing your current rental property or finding something within your budget. Either way, taking action or formulating a plan is crucial.

The real estate landscape is full of opportunities and possibilities, and we’re here to help you make the most of them. Reach out to The TanTeam today for personalized guidance tailored to your unique situation.

The TanTeam Real Estate Group

-Kai and Tan