This seems to be the biggest question I get these days.

Some think that house prices will magically drop 20-40% in the next year or so.

Some think that interest rates will drop over the same period and it will cheaper to get into their own home when that happens.

Some dont believe that rents will keep going up.

Lots of things to think about for sure.

First things first, prices are unlikely to drop by any more than you can negotiate off of the seller for a property you want.  Why?  Supply is short, demand is not.  As long as there are multiple buyers per property, it will be hard for prices to come down and if you read (and trust) anything you see in the news, supply will be an issue for sometime until the Government can figure things out finally.

It is likely that interest rates will eventually start to drop.  How much?  Thats the billion dollar question and one that very few (likely even the BOC themselves) cannot answer this question.  Lots of things have happened over the last year or so that many could not have predicted so why even bother trying to figure out what the brains at the BOC will do next.  What you can bank on though, it rates do start to come down, it will likely be a signal to those buyers sitting on the sidelines to jump back into the market which could very well cause multiple offers, offer presentations (with the intent for multiple offers) and zero condition offers (which puts the homebuyer at risk since they are waiving their right to qualify for financing before firming up the offer).  My guess is that this will push prices up yet again and will likely push more buyers into a position where they cannot compete for homes and most likely will get priced out of their markets.

As long as the variable rates keeps going up, so to will rents since many who own rentals will continue to sell since they cannot keep up with their payments due to the higher rates.  What does this mean?  Fewer rentals and more renters fighting for those renters = higher rents due to the competition.

Just yesterday, someone asked me when is a good time to get into the market – they couldn’t qualify for a mortgage and wondered if rent to own would be a good option for them – my answer (after debating it for a minute) was that NOW is the a good time since we aren’t seeing as much competition in the market and have been able to secure properties for less than the listed price.  This has been an anomaly  in recent times but it is what we are seeing across most markets right now.

SO – if you are realistic about what the market is doing and what it will likely do (see above) and you want to get into the market sooner than later – NOW- would be a very good time to purchase if you want to avoid rising prices, competition for properties and like the idea of protecting yourself with inspection and financing clauses.  This is likely the way things will be until rates start to come down although with the BOC not raising rates yesterday, it could be a flag (maybe a false flag) for some buyers that the rates are only going to come down from here on out and they may come back into the market looking to buy their own home (since renting is almost as expensive these days).

No matter which way you lean – they bottom line is that we are likely going to have to wait for more supply in the market and it is logical to assume (with immigration as it is) that the demand is only going to keep increasing.