For most people, getting a new home is the most significant investment of their lives. The real estate industry is known for its high prices and mortgage rates, most people become reluctant to purchase a home in this current economy. However, with more people working from home, there has been a change in the general mindset.
After years of high prices and low mortgages, the pandemic has slowed down the housing market. Most economists estimate the decline will not be as severe as during the Great Recession. However, home prices are expected to drop significantly. If you want to learn more about prices for a home in 2022, here are the basics for real estate investment.
Bank of Canada and The Greater Toronto Area
In March of this year, the Bank of Canada, also known as BoC, began raising its overnight lending rate for the first time since the beginning of the COVID-19 pandemic. This caused the real estate market to fall rapidly. From a 0.25 percent interest rate at the beginning of 2020, the bank raised its rate to 1.5 percent, making house prices in the Greater Toronto Area lower even more. In July, the rate was raised to 2.5 percent, causing further devaluation.
This price fluctuation came after record-breaking prices due to the shortage of alternative housing units and the increased demand for remote workers. However, due to high unemployment rates and inflation, the people’s buying power has also reduced, causing most properties to lose value.
How Are Prices Looking in Caledon?
Situated in the Regional Municipality of Peel in the Greater Toronto Area of Ontario, Canada, Caledon is primarily a rural area with good urban development. Over the past year, sales have fallen significantly in Caledon.
Compared to the beginning of the year, the average price for a detached single-family home was around $2,000,000. Still, it decreased significantly until June 2022, with the same property being sold for around $1,600,000. According to Toronto Regional Real Estate Board, just two months later, the median price for a home was $1.31 million.
Single-family homes have dropped around 2.4 percent, averaging $1,630,000, while semi and attached homes are around $900,000 to $1.04 million this year. Single-family units are right now one of the most popular and sought-after properties, with 26 monthly sales being connected to associated listings.
Caledon properties offer a variety of properties, so you can take advantage of the recent price drops and invest in your dream home. Detached, semi-detached, and attached houses, have steadily dropped in price over the past few months. Townhouse-style condos have remained stable, going up 2.2 percent every year. The average price for this type of property averages $705,000 as of September 2022.
Which are The Best Types of Property to Buy Right Now?
Looking at the past trends, it’s clear that the most stable property right now is the townhouse condo, which is understandable, considering the latest changes in the economy and lifestyle of the people. Raising costs for gas and electricity have determined many to move closer to the city and avoid the expensive suburban lifestyle.
Although the prices for condos are smaller compared to single detached units, their stability in price over the years can be a huge advantage. Detached and semi-detached houses can have periods in which their value market is incredibly high and then significantly lower in just a few months. Despite all this, their property value has increased steadily over the past few decades, which is essential to consider if you want to buy a home as a retirement asset.
More and more people are concerned about the future recession and inflation affecting the country. If you’re a first-time buyer, upsizer, or investor, looking at the trends will help you make a financially responsible decision. The best option for you right now if you’re unfamiliar with the stock and real estate market is to consult a broker, or a real estate agent specialized in the Greater Toronto Area. They can help you look through the monthly listings from Caledon and choose the ideal home for your needs and budget. No matter how you look at it, buying a Caledon home in 2022 and 2023 is looking better and better!
Veeramachineni Lalitha
I am Finance Content Writer. I write Personal Finance, banking, investment, and insurance related content for top clients including Kotak Mahindra Bank, Edelweiss, ICICI BANK and IDFC FIRST Bank. My experience details : Linkedin