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Buying or Selling in 2023? Here’s How to Prepare Now

Daniel Crook by Daniel Crook
November 4, 2022
in Buying a Home, Canada, Market Insights, Moving Tips, Selling Your Home, Uncategorized
Reading Time: 5 mins read
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The Canadian real estate market has been far from dull this year. Prices hit record highs in the early part of the year, but quickly turned to a stalemate between buyers and sellers as interest rates began to rise. In a survey of more than 1800 Zoocasa readers, 60% said they were planning to buy in the near future. Many are holding out hope for more inventory in the spring and the end of interest rate hikes. If you’re looking to get into the market in 2023, now is the time to start preparing. Although we don’t know exactly what next year’s market will bring, we do know how you can get a head start to be ready for it. Here’s how to prepare for the 2023 Canadian housing market.

Talk to a Mortgage Broker Now to Learn What You Can Afford

Mortgage rates are an obvious concern for a lot of prospective homebuyers and existing homeowners with a mortgage. The Bank of Canada has raised rates six times this year in a bid to curb inflation, with the next announcement scheduled in December. The inflation rate in September was 6.9%, with the eventual goal being around 3% by the end of 2023. It’s possible that if inflation isn’t trending downwards during 2023 then interest rates may have to rise even further. This would, of course, have an effect on the prime lending rate for anyone trying to secure a new mortgage,renew their existing mortgage, as well as anyone currently on a variable rate. 

The first step in preparing to enter the market is talking to a mortgage broker. A mortgage broker will look at your current financial situation and discuss your debt service ratios. This is what lenders use to calculate the maximum amount you will qualify for. It’s important to talk to a variety of mortgage brokers, and explore lenders outside of the big banks. They can often offer lower rates and different mortgage options. Getting a mortgage pre-approved will help you in your hunt. A pre-approval guarantees the rate you’re offered will be available to you for the next 160 days. So, in the event rates increase in December, or early next year, you’re covered in the early part of your home search.

  • Read: Buying a Home? Here Are 5 Ways to Save for Your Down Payment

Keeping an eye on inflation is paramount if you’re looking to buy in 2023. If it continues to trend downwards towards the Bank’s target, then rates could stay around their current level or even drop further, making the variable rate mortgage a smart option. “Anyone with less flexibility in their household budget should consider locking into a fixed rate. Anyone with flexible household finances might hang on to their variable-rate mortgage in anticipation of future declining rates that may be needed to stimulate the economy if we end up in a recession,” said James Laird, Co-CEO of Ratehub.ca and President of CanWise mortgage lender.

What Are Your Needs vs. Your Wants?

It’s important to consider what your needs are compared to what the “nice to haves” are on your list. If you’re a parent, living near good schools might be on the “need” list, but being flexible and exploring different neighbourhoods with good schools could streamline your journey to finding the right home. Read more here about how Zoocasa clients found their dream family home by being flexible. 

  • Read: What Type of Home Should a First Time Home Buyer Look For in the GTA

Considering where you want to buy, the type of property, housing costs, and other important amenities should be at the forefront of your mind when buying a home. Once you  understand what budget you have to work with, then you can get a better idea of how to get a home that meets your needs (and maybe some of your wants too). You can work out what kind of wiggle room you have for these things once your finances are in order.

Prepare for Changing Markets

Spring is usually the busiest time for real estate. Read more about the real estate cycles here. While the market has seen a slowdown in recent months because of the interest rate hikes, the spring often brings in more buyers and sellers. In April 2021, there were 16,363 sales. This April was quieter due to interest rate announcements but with 8,008 sales, it still experienced more activity than in January this year, when interest rates were still low but there were 5,636 sales. Sales for October totalled just 4,961. 

While we are seeing less bidding wars and competition now, many prospective buyers and sellers are feeling optimistic about the spring market, which could bring some competition. If you’re buying, find a local real estate agent now that understands your homeownership goals and can help you make them a reality. If you’re selling, it’s best to be ready to negotiate (this also applies to buyers!) and find a qualified realtor that will position your home to appeal to the greatest number of buyers. 

Whether you’re looking to buy or sell in 2023, your best course of action would be to speak to one of our experienced real estate agents who can guide you through the process and help you make the best decision for your future. Check out our five star reviews to see how Zoocasa agents have helped their clients find their dream homes. 

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Daniel Crook

Daniel Crook

Daniel Crook is a Content Marketing Specialist at Zoocasa. Daniel’s insights provide home buyers and sellers with knowledge of local and national markets to aid them in their real estate pursuits. Daniel covers a multitude of topics, ranging from mortgages to local market trends, as well as data-driven reports uncovering national trends. His work has been featured in outlets such as BNN Bloomberg, CTV News, the National Post and the Globe and Mail. You can find all his latest insights on the Zoocasa blog.

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