To renovate a house or to buy a house?
The real estate market shows no signs of slowing down, and we’ve seen average Canadian house prices increase in most major regions even into early 2022. Despite interest rates slowly trending upwards to where they were before the COVID-19 pandemic, buyers and sellers on the market haven’t been deterred. For homeowners that don’t wish to sell their properties but still want to capitalize on this opportunity, using home equity financing is a great option to consider.
Why are house prices rising?
The real estate market has seen a huge increase in activity since the start of the pandemic, due to the record low interest rates being offered by most mortgage lenders. Many Canadians have viewed this as a once-in-a-lifetime chance to secure an incredibly affordable mortgage for their homes, which inevitably results in high average house prices.
That being said, even though it’s been almost two years since COVID-19’s effects on the economy were felt, the current real estate market is being carried by high buyer interest and competitiveness. Though interest rates are well on their way back to normal, many homes continue to sell for well above the asking price, and we can expect to see house prices keep rising well into 2022.
How much did average Canadian house prices increase in 2021?
According to the Government of Canada’s statistics, the average Canadian house prices increased in 2021 by a whopping 10.3%, compared to only around 2.1% in 2020. This was the largest annual average increase in over 30 years.
Ontario and British Columbia showed the highest increases, specifically in the Greater Toronto Area and Vancouver regions. In some regions, like the Maritimes, Calgary, and Edmonton, increases were more modest. It’s also important to note that most house price increases in 2021 were for single detached homes, and have been much higher than condominiums and apartments.
But this trend shows signs of continuing well into 2022, which means that we can expect average Canadian house prices to keep rising as buyers and sellers negotiate bigger deals.
Will the housing market crash in 2022 in Canada?
According to experts, the Canadian real estate market is currently in a “bubble”, which means that when it pops, we might see a housing market crash in 2022. It’s difficult to tell when this might happen, but the possibility of a market crash is very real, and might result in a sudden and drastic drop in average Canadian house prices.
This means that homeowners looking to take advantage of high average house prices in Canada should do so sooner rather than later, before the market crashes and normalizes as experts are predicting.
How rising average housing prices in Canada can benefit you
House prices going up may not be a good thing for some Canadians, especially those looking to secure an affordable home for themselves. However, homeowners that own equity in one or more properties, it’s a fantastic time to consider financing any projects or ventures through home equity line of credit or loan options.
In the long run, having your home value increase means that your property is also assessed at a higher price by lenders. You can access a larger loan that you would normally be able to, which can be perfect to use in a number of financial scenarios, from covering a down payment, making home renovations, or paying off outstanding debts to consolidate your loans.
At Alpine Credits, our experts know the ins and outs of home equity financing, and we approve our customers regardless of their age, income, or credit history. With over 50 years of experience, you can get the financing you need with the people who know home equity financing the best.