It's hard to believe that we are in the beginning of the Christmas season again. With Remembrance Day in the rear-view mirror and eggnog back on the shelves, I feel very unprepared for the holiday season to start.
However, it does pay to be prepared in the current market conditions. Consider that we just recorded the lowest tally for home sales in October since 1995!
Adjusted for population, we are now seeing demand lower than in the depths of the 2008 financial crisis.
Sales are weak, but population growth is not. That means that demand has not been permanently destroyed, rather constrained by affordability challenges. When these ease (by falling prices, falling rates, rising incomes, or some combination of these), demand will return in force. The big question is how long that will take. If the bond market is any indication, it is pricing in rate decreases in April 2024.
Many properties being listed on the market are still priced at last year's levels, as evidenced by the above graph. Home price expectations are still elevated, meaning that sellers are having a hard time reducing their prices to buyer expectations. That being said, there are opportunities in the current market. Several favorable changes have opened up opportunity throughout Canada that discerning investors are taking advantage of.
Things like the MLI select program, which provides favorable financing on commercial properties (5 units and up), and the elimination of HST on purpose-built rental properties are two things that I am watching closely. As more investors head south to the US looking for favorable real estate deals, I am seeing some cool projects in Alberta and Ontario where investors are constructing suited townhomes or semi-detached houses in a block and getting a blanket commercial mortgage over the block. With the HST rebate and favorable financing, these projects are looking more and more attractive. With high inter-provincial migration toward Alberta away from Ontario, this may make sense sooner rather than later.
For those looking for flip projects or multi-family projects, there are deals to be found on the MLS as well. If you are able to stomach some market fluctuations and short-term high borrowing costs, purchase negotiation and due diligence periods are back in full force.
If you'd like to dive into some details about any of these projects, just tap the button provided below, and I'll reach out to you! Happy house hunting!
Have questions about your portfolio or want an outside opinion? Please select the button provided below, and I will schedule a free half-hour call with you to go over your situation! Talking to the right people can really save you money. I really believe that this is the time to expand your network and learn from those around you. I'll be in touch!
I'd love to hear your thoughts on this! Have a great week while working past those obstacles on your climb to success. Let's Grow Together!
Real Estate Investor and Entrepreneur
Jonathan Beam is a real estate investor in the Niagara region who is passionate about helping you achieve financial freedom through real estate. He works with new and experienced investors to formulate a plan that fits your specific situation and provides market guidance and consultation on the best places and strategies to pursue within the Niagara Region. Book a free, half hour no obligation consultation to see how he can help you to achieve your goals. His travels are available at www.realestateandrepeat.com
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