Home Prices in 2014 and Impact on Potential Homebuyers
Zoo Mortgage (www.ZooMortgage.ca), the Greater Toronto Area’s leading private consumer financing company, is commenting on the recent outlook for home prices for the remainder of 2014 and the impact affordability will have on potential homeowners in Toronto and the surrounding areas.
According to a recent report, Canada’s housing market will continue to remain robust for the remainder of 2014, thanks to the ultra-low interest rate environment and increased demand. Home prices across the country are expected to climb an average of five to six percent by the end of the year. The general consensus is that the housing market will cool over the medium term. (Source: “Quarterly Regional Housing Report,” TD web site, July 3, 2014; www.td.com/document/PDF/economics/special/QuarterlyRegionalHousing_July2014.pdf.)
“After the harsh winter, many economists expected Canadian home sales would flatten out, but that hasn’t happened,” says Luciano Giustini, owner of Zoo Mortgage. “In fact, the demand for housing surged in May, with the average resale price climbing 7.1% year-over-year to $416,584, surpassing the 10-year average growth rate. That annual increase is also unfortunately well above income growth, meaning it’s getting more and more difficult for first-time home buyers to get on the property ladder.”
What does it take to afford a home? Giustini explains that with a national resale home price of $416,584, the annual gross income needed to afford that property with a five percent down payment and five-year mortgage is around $89,300. According to Statistics Canada, the median family income in Canada is $76,000—a shortfall of approximately $13,000. (Source: “National Household Survey (NHS),” Statistics Canada web site; http://www12.statcan.gc.ca/nhs-enm/index-eng.cfm, last accessed July 4, 2014.)
“The national housing figures are skewed to the upside by red-hot real estate markets in Toronto, Vancouver, and Calgary. For example, in Toronto, the average price of a detached home is $943,055,” Giustini adds. “With housing prices expected to remain strong throughout the rest of the year, first-time home buyers tired of being outbid may want to consider expanding their horizons to the many parts of the GTA offering better affordability.”
Fortunately, Giustini notes that borrowing costs remain near record lows; this represents a great opportunity for potential home buyers looking to get pre-approved on their mortgages. Instead of approaching one of the big banks, which will only promote their own lending products, first-time home buyers should contact the independent, licensed agents at Zoo Mortgage.
“At Zoo Mortgage, we want to show potential home buyers that there is a way to afford their dream home,” Giustini concludes. “With access to a large number of Canada’s top lending institutions, Zoo Mortgage helps clients get the mortgage best suited to meet their lifestyle needs, both now and when interest rates begin to trend higher.”
Zoo Mortgage is one of the most trusted private mortgage agents in the Greater Toronto Area. The independent, unbiased, and licensed mortgage agents at Zoo Mortgage assist clients with both acquiring and renewing residential and commercial mortgages, home equity credit, consolidating debt, and financing-related concerns, including refinancing. To learn more about Zoo Mortgage, visit the company’s web site at www.zoomortgage.ca, contact Zoo Mortgage by phone at 1-888-481-2858 or by e-mail at email@example.com, or by visiting the Zoo Mortgage office at 3582 Major Mackenzie Drive, Woodbridge, Ontario.