The question on most people’s minds is; ‘Should I hold off on buying something?’
People that are contemplating getting into the market are are inevitably scared of a ‘downturn’, but when you’re deciding on how much money to put in to any investment, not just real estate, you need to factor in the risk of prices going down.
Joannah Connolly of REW.ca and Real Estate Weekly newspaper writes that nobody knows exactly what’s going to happen in our market, but she goes on to say;“What we do know is that real estate, just like the economy, is cyclical in nature. It will go up, and it will go down. We can be reasonably sure that, over the course of any 25 or 30 year mortgage, your home’s value will go up overall during that time, whether you purchased it during a peak or a trough in the cycle.”
She goes on to list a few simple rules when buying a home that will keep you safe and smiling.
- Make sensible choices and don’t overstretch yourself.
- Ensure that you’d be able to refinance the home if in five years’ time it was worth a bit less than today.
- Ensure that you’d be able to pay the mortgage even if interest rates went up a bit.