“Many people, especially first time home buyers are desperate to get into the market and although realistically some know that they can't afford it, they are going to the top end of their budget to get into the market,” mortgage professional Atrina Kouroshnia wrote in an August 10 analysis for HuffPost Business Canada
. “They feel like if they wait they will be shut out entirely.”
“In addition to these panic-stricken first time buyers are home owners in different parts of the country who have purchased a home and are now falling behind on mortgage payments, or are being forced to live on such a meagre monthly sum to ensure their mortgage is paid and so they have no real quality of life,” Kouroshnia added.
The analyst observed that these levels of anxiety are not surprising when the prevailing economic and fiscal climate is taken into account: homes are over three times as expensive as they have been four decades ago, but full-time earnings in the 25-34 age bracket have shrunk by $9,000 over the same period.
But while it might seem tough to do so considering the depressing figures noted above, Kouroshnia maintained that a circumspect approach is the best tool that a hopeful home owner can deploy in these circumstances.
“In the meantime, try to stay calm and save on,” she stated. “Very rarely are good decisions are made when emotions are high.”
“Interest rates won't stay low forever; and market changes can happen at any time just like the new 15% foreign tax implemented abruptly. Exploring all options for those with real estate fever—whether that be starting out with a small investment property
or moving further to get into an affordable home—should be really be on the conversation table.”
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The current wave of mass hysteria in Canada’s hottest residential real estate markets is overpowering consumers’ ability to consider their options in a rational manner, leading to many would-be buyers overextending themselves financially.