| Summary
We expect to see multiple & competing offers, with NO Financing Conditions for all home types, priced from $200k to $750k, starting now, and growing to full-scale crazy by May.
Use this time before May 2024 to take advantage of slight & short term softening of the market before:
- News of lower mortgage interest rates ignites a powder keg of sidelined, eager, competitive buyers.
- Prices continue to climb due to continued competition from 4 million New Canadian immigrants for the few homes on the market; for the next 4 years!
- Calgary housing will remain in super-tight supply with record inter-provincial migration from BC & Ontario AND 4 million New to Canada Immigrants arrive before 2027.
We support NO CONDITION & LOW CONDITION OFFERS!
Your #1 concern will be: how does my offer win among 5, 10 or 20 others?
Will you have the confidence in your broker or bank to write a No Condition or Lo Condition Offer?
To take your 1st step to a FULLY Pre-Undewritten, Pre-Approval; that could go NO Conditions, if needed – click here.
DETAILS
1. Mortgage Rates
Have Decreased Already – but on the down low.
Without media attention, About 20 tiny reductions have already happened for FIXED RATES.
- Fixed rates have been slowly and quietly decreasing from Post-COVID 20 year highs; they were ~7% and are now ~5%
- Most people are only aware of the 10x Prime rate increases in a row post-COVID in 2023/23
- Prime has held steady at 7.2% since then,
- 1st Prime reduction expected in July and it has already been “100% priced-in” by the stock market.
- Inflation and the Consumer Price Index came in at 2.9% and is now back inside the target range of 1.0% to 3.0%.
Why the Rush?
1A. Joe Public is now correctly thinking;
- the slight extra interest cost of buying now with marginally higher mortgage rates and some actual inventory selection to shoose from; far, far, far out weighs …
- the small increase in buying power from lower rates that is sure to come with
- massive price increases when buying in the frenzy starts after the BoC rate cuts hit the news.
1B. 50% of Exhausted Buyers plan to re-enter the market when rates drop
A recent survey, half (51%) of those who put their home purchase plans on hold, now say they will re-enter the market when they hear that rates have dropped.
- A decline of just o.25% would be enough to bring 10% of those people back,
- A decline of 1.00% would bring back 23% of those sidelined
- the Prime rate (for variable rates) is expected to go down 2%, and fixed rates could easily sneak down another 1.5% yet too.)
1C. AUTO_RATE_FLOAT_DOWN helps
In a decreasing rate environment, if the rates goes down AFTER you sign, you still AUTOMATICALLY get the lower rate right up until 5 business days before you move in.
See the GRITTY details of WHY THE VARIABLE RATE IS THE WAY TO GO HERE
- The Variable lets you take advantage the rates going down over the next 28 months, right now. It goes you an option to not take a fixed rate at near 10-year highs.
2. Home Pricing
Home prices in Alberta and Calgary are FULLY SUPPORTED, and will NOT be dropping at all, due to continuous demand from record setting immigration for the next 5 years.
- Alberta home prices are about 45% lower than Ontario and BC right now. (See graphs below.)
- Alberta does not have PST nor a 1% “Welcome to the Neighborhood” Property Transfer Tax that BC and Ontario have.
- Detached home prices increased $100,000 in 2023. We are forecasting an $80k increase for 2024.
Prices are expected to further INCREASE for the next 5 years due to these data points below:
3. Current homes prices well below national average:
For 2023: Calgary; up 4%, Halifax; up 3%, Victoria; up 1%
- All other cities in Canada are down 18% to 21%‘; which really means Calgary is really up about 24%
- The average home in Calgary is $680k, same home in Victoria is $950k, Vancouver, $1.1M, Ontario $1.4M
4. Inter-Provincial Immigration Continues…
Record Numbers of people moving from: Ontario & BC to Calgary & Alberta
- Highest amount of people moving to Calgary FROM BC and Ontario in the last 20 years for affordability.
- This will continue until Calgary’s home prices are closer to BC and Ontario.
- Alberta looks to be the best option because the housing shortage is considered extreme right now in BC and Ontario.
- Vancouver vacancy rate has been among the lowest in Canada for the last 50 years
- Toronto vacancy rates dipped below 1% between 1997-2001
- More than 50% of our business today is now from buyers moving to Alberta.
4A. Peek New-to-Canada Immigration
Overall Canada’s population growth is 3.1% – 6x higher than the USA at o.5%.
- 1.2 million new Canadians arrived in 2022 – highest growth of all the G20.
- 4 million new Canadians are on the way before 2027; where will they live?
- Housing is already tight and with so many moving to Calgary, rentals and home prices will go up.
4B. Young Adult Population Growth Breaks Records
Population growth of people 20 to 29 years old — an age when most young people leave home and get their own place — has shot up 6.2% in 2023.
- That’s 2x Canada’s already hefty overall population increase, which also broke records.
- “We have never seen the young adult population growing anywhere nearly this fast before,” an analyst wrote. “Putting additional pressure on rents now, and in the medium term, it will put pressure on home prices.”
- See the red-blue graph below
5. Renting in the Wild West
37% of Canadian households are renters.
- New renters are on the scene from an unprecedented rise in working age population – up 874,000 in 2023
- Rent inflation was 8.2% in October 2023 – highest in over 40 years.
- The difference between rent inflation and “standard inflation” is the highest in 60+ years.
6. Surging Construction Costs Impede New Home Supply
Costs to build a home are up 51% since 2020.
- High costs for all inputs, scarcity of skilled construction workers, higher mortgage interest rates for builder’s financing, supply-chain bottlenecks from COVID. (See the graphics below.)
- Forest fires from 2020 to 2023 have reduced the supply of lumber.
- 100,000 new construction workers are needed in Canada.
- Most will be “temporary foreign workers” also hoping to become citizens and buy the same home supply they are producing.
- Construction wages were up 11.5% in 2023.
{INSERT about 20 FANTASTIC GRAPHS that show it all here}
What about COMPETING / Multiple Offers?
- We do Lo/No CONDITION OFFERS with Pre-underwritten, Pre-approvals that actually work.
- And I answer my phone from 9-9 x 360 so you can win your competing deals at the last second.
- Banks don’t offer this service. We have been doing this since “the Rush of 2007” when home prices were going up $1000/ day. This will be similar.
No matter what the Bank of Canada does or doesn’t do, we will:
- Continue to answer the phone in the 1st ring from 9-9 x 365
- Support Lo/No Condition offers with Pre-underwritten, Pre-approvals that actually work.
- Start a 120 day rate hold for you, from the exact day the next rate increases happen – we do time the bottom of the market for you.
- To start a PRE-APPROVAL, click here
We welcome the opportunity to prove it in the weeks ahead. |
