Among all the talk of a housing bubble in Canada, many experts have stated that we should all relax because housing prices are expected to go down 5-10% within the next year. But according to members of the Canadian Home Builders’ Association, with the cost of lot prices increasing, and stricter constructions standards, the cost of homes could actually go up, not down.
The CHBA released their Winter 2012 Pulse Survey last week, a survey that questioned builders and asked their opinion on where the housing market, and the prices within that market, are going. This year, 63% said that they expect home prices to rise, with one-third of builders in that percentage citing the increased cost of serviced lots as the reason. This problem is most notable in two provinces – 50% of builders in Manitoba were concerned with the increase of lot prices, while 44% in Ontario shared their concerns. And while builders are concerned, it’s ultimately the consumer applying for a mortgage in Toronto or Winnipeg that’s going to feel the pinch when they’re faced with higher home prices in this area.
The amount of local regulation happening in these areas, and all other areas of the country, are also bringing increased costs to home builders, which they then in turn need to pass onto the consumer in the way of higher home prices. While last year’s survey showed that only 19% of home builders were concerned about those stricter standards and regulation, while this year’s survey shows that those numbers are going up – all the way to 25% of home builders now saying that they have concerns.
This new survey might rain on many homebuyers’ house-hunting parade, but it also indicates that now is the time to buy if you’re thinking about home ownership in the next year, and experts all around the country have ways that buyers can still save money, even if costs do go up. Reader’s Digest recently weighed in on the issue, saying that major savings are being lost on property taxes every year; and that Canadians need to obtain their home’s assessment, contact the local assessor’s office, and look for any errors that could be costing them thousands of dollars every year.
Others point to the brokerage industry, saying that Toronto mortgage brokers could be especially helpful in getting homebuyers the best deal, especially at a time when a “mortgage war” is currently going on throughout the country, confusing buyers as to what is actually the best deal for them. Mortgage brokers will also be able to outline other ways that homebuyers can save on costs, helping off-set some of the increased housing costs, should they go up.
