It is unlikely that there will be a “crash” in the housing market (I mean, we have been told this would be happening for the last 10 years it seems).  Instead, you will see more of a softening (which is happening now) until rates start to stabilize or drop – when that happens, watch the housing bubble start to take off again as more buyer will enter the market; the same market where we have still got little supply.

Check out this amazing article from the Financial Post.

“Now could be a great time to buy a home if you are ready to enter the housing market”, says an industry expert

Leah Zlatkin, mortgage broker and expert, said homebuyers could “really get a good steal” while the market is slow in December.

Once the Bank of Canada starts cutting interest rates in the new year, as expected, homebuyers will jump back into the market, pushing up competition and prices, she said

“There is a bit of a volatile future ahead of us,” Zlatkin said in an interview with the Financial Post’s Larysa Harapyn. “For many consumers, right now is the right time to buy.”

Variable rate mortgages are also looking more attractive on predictions that interest rates could start coming down as early as next April.

“Variable rates do have a great spread right now,” Zlatkin said. “There’s an opportunity for you to ride that curve down while making a large purchase.”

Zlatkin doesn’t recommend variable-rate mortgages for first-time homebuyers who cannot tolerate a lot of risk, but it might be an option for experienced investors.

“There’s a lot of savvy investors who feel they understand the market and know the market and who are willing to bet on variable rates going down,” she said.

However, she cautioned that homebuyers should be secure in their job and finances as the economy is expected to fall into recession.  “If you’re worried about your job position … perhaps it’s not the right time for you to get into the market,” she said

“In the past, we’ve seen analysts be wrong,” Zlatkin said. “You have to take it with your own pace and determine whether this is the right information for you to base your decisions on.”

Sales are slow in Toronto, Canada’s biggest housing market, but the influx of newcomers should bolster future growth and demand.

“The fact that we’ve got a lot of people coming into the country is terrific,” Zlatkin said. “It’s possible that some of the people who have been renting will now start buying.”

Full article – The Financial Post