There seems to be nothing about COVID-19 that’s predictable. Not so long ago, we were hunkered down indoors, second-guessing even the thought of stepping outside. Today, we’re enjoying the summer weather, and spending time with friends and family.
So how does this difficulty in predicting anything during the pandemic affect residential real estate and, more to the point, what should you do if you’re considering buying a home during COVID-19 in Markham right now?
3 Things to Consider if You’re Buying a Home in Markham During COVID-19
No one can say what will happen in real estate markets tomorrow, next week or next year. But there are a number of recent news stories and events that may affect the market.
- Home Prices – Many people who were already in the market for a Markham house for sale may have hoped that COVID-19 would significantly reduce home prices. But, while prices softened somewhat early in the COVID-19 quarantine, the average price of homes of all types in Markham in May, 2020, was up almost 12% versus May, 2019.
- New Mortgage Rules – On July 1st, new mortgage eligibility requirements were introduced by the Canadian Mortgage & Housing Corporation (CMHC). The new rules lower the amount of debt borrowers can assume, increase the credit score required to qualify for mortgage insurance and require that borrowers use their own funds, not loans, for their down payment.
While it’s too early to tell exactly what the effects of the new requirements are, the changes were made to reduce the demand for housing and the “unsustainable housing price growth” it can cause. - Mortgage Rates – The Bank of Canada has lowered its key interest rate a number of times since the beginning of the COVID quarantine. At 2.5 %, it is now at its lowest point in 10 years and mortgages continue to reflect the new rates.
To find out more about mortgages during COVID-19, check out our article “I’ve Lost My Job Due to COVID-19, Can I Still Get a Mortgage?”