If this is the year you’ve been dreaming about – the year you purchase a new home, we’ve rounded up a short list of things to consider before you do. As an informed home buyer, you’re doing your research, touring neighbourhoods, learning about communities, builders and homes that are for sale. This is all great and will help you make a decision that is right for you. Some of our items to consider might be things you’re already thinking about, and others might be new information. If you want to buy a new home this year, gather the tools you need and surround yourself with experts so that when you make your move, it’s a smooth and memorable experience!
Here’s our list of the top things to consider when buying a new home in 2022:
Finding The One
If you’ve been house-hunting for a while, this will come as no surprise to you: finding the right home for you can be challenging!
It takes time to research neighbourhoods and communities. You have to make a must-have list and a nice-to-have list, with items like the type of home you want, the size and also think about its proximity to amenities, schools and transit, if that’s what suits your lifestyle.
Once you shortlist neighbourhoods you like, you may encounter a supply problem. In established neighbourhoods, it can be hard to find resale homes that check every box, especially if you aren’t in the market for a renovation.
New construction homes are being built as swiftly as they can, especially in the GTA, where it can take time to get shovels in the ground and there are only so many tradespeople to go around to build and finish the structures. If you do your research and get to know a reputable builder, you can stay informed about upcoming projects and releases of homes in communities under construction.
Purchasing a new construction home in 2022 is an exciting way to buy a new home this year because you can watch your home be constructed from the ground up. You also work with a design professional to select exterior and interior finishes that will ensure your new home is designed to your personal taste.
Knowing What You Can Afford
In March 2022, the Bank of Canada announced that it would be raising interest rates, a move many had been expecting. If you are planning to buy a home in 2022 and you have already engaged a financial expert and have attained pre-approval for a mortgage, then you may have avoided some extra costs. It’s important to check in with your experts and know how long the pre-approval rate lasts.
If you are wondering about buying a home with the increased interest rates, the best thing you can do is meet with a financial expert and figure out what type of home you can afford. This step will help you narrow down your choices and it is best to do before you begin house hunting. Understanding your budget will help guide you to different locations, home types and sizes, depending on what you can afford to spend in 2022.
New vs. Resale Homes
Considering a new home or a resale home is an important step to take before purchasing a new home this year.
A new home can take time to be constructed, but you do get to select finishes with a professional designer that are in your taste and style. You also have to consider the community. If you are moving in during a later phase, there could be roads, homes and some amenities already constructed, but if you are moving in just as the community is getting started, you get to experience it coming to life.
A resale home may be in an established neighbourhood, with existing parks and amenities in place, but you may not get the design or finishes inside the home you prefer. The home may need some renovation or repair, depending on its age and former owners. There also could a difference in price, depending on the location. In many cases, homes in established neighbourhoods are priced higher than they would be in new communities.
Invest in Your Future
Buying a new home might be the biggest investment you make in your lifetime. It is an investment in your future.
A Leger survey conducted on behalf of the RE/MAX Canada revealed that nearly half of Canadians still think that buying a home is the best investment decision you can make today.
“Canadians recognize the value and investment potential in their homes. However, market challenges such as rising prices and limited supply have impacted local markets from coast-to-coast, causing angst this past year among those looking to get into the market and those hoping to move up in it,” says Elton Ash, Executive Vice President, RE/MAX Canada.
“Despite this, it’s encouraging to see that many are feeling confident in the housing market in 2022 and view Canadian real estate as a solid investment.”
Whether you are buying a new home as a primary residence, a second or vacation home or you are a first-time home buyer, the real estate market is robust and resilient. The Centre for Urban Research and Land Development reports that as of 2016 more than 700,000 millennials in Ontario’s Golden Horseshoe area alone were still living at home and likely to be aging into the market.
“I think we’ve been underestimating the impact of millennials entering home-buying age,” says Diana Petramala, senior economist at Ryerson University’s Centre for Urban Research and Land Development. “Millennials were holding less real estate but more cash in 2019 than generations before them. The ones that could afford to have clearly been saving for that down payment.”
Investing in real estate, in a good location with appreciation potential, is looking like a smart move for many in 2022.
If Not Now, When?
In 2022, the real estate market will continue to offer choice and investment opportunities, especially in the Greater Toronto Area. With the recent Bank of Canada rate increase and encouraging easing of supply chain and pandemic-related issues that impacted the market over the last two years, this could be the right time to purchase a new home. If you have researched your options, engaged experts to help you make an informed decision, then this could be your year! Consider this: if not now, when?