As the market around us seems to be pointing towards trends never seen in a city like Montreal, what's the best move? Is it the right time to buy?
From one millennial to another, he shares some of his top tips for young people trying to enter the market.
Answers have been edited and condensed for clarity.
What tips do you have for anyone looking to buy their first place?
In the current market, which is highly competitive, with an increasing number of multiple-offers situations, I would definitely recommend working with a real estate broker. Real estate brokers have access to a large amount of information that is crucial in a transaction.
Even in the current conditions, it is really important to have an inspection done on the property and review all the documentation in detail. The current market is stressful for first-time buyers, and you wouldn't want to make a mistake buying your first home.
I would also recommend using the Home Buyers' Plan (HBP), which is a program that allows you to withdraw from your registered retirement savings plans (RRSPs) to buy or build a qualifying home. This program allows the buyer to withdraw up to 35 000$, helping a lot in the first purchase. If you don't have RRSPs yet, don't worry. Mortgage brokers or real estate brokers will be able to guide a new buyer in that process.
Also some great advice; choose a real estate broker you trust, appreciate and connect with. Ask as many questions as you want; it's in our mission to give you all the tools you need to make a decision that fits your needs, your means and aspirations, and to help you succeed in every step of the process.
A first buy is a significant step in building your assets, and probably the first transaction of many. By choosing the right professional for you, you find a trusted advisor that will help you create value in your real estate journey as well as help you seize great opportunities.
Where do you see the future of real estate in Montreal?
It's a great time for real estate right now! Even with a pandemic, the market continued its incredible performance in 2020, with total sales of $9.6 billion in Montreal only.
The average price for a single-family house grew by 14.3% in 2020 (2020 vs. 2019). Inventory is pretty much all types of products is historically low.
The real estate market prices essentially depend on two major factors: supply and demand. As long as the number of buyers remains high and the inventory remains low, I don't see the prices going down any time soon. I think priorities are changing and the products in new construction will need to adapt.
A high number of people are now working from home, which makes a private working area and a nice exterior space crucial.
What are the common misconceptions about buying versus renting?
I think the most common misconception is that renting is better than buying. With the current interest rates that are historically low, the argument that renting makes more sense financially on the long run does not stand.
Owning an asset that appreciates in value over time, while paying back a loan at a very low-interest rate? You can't beat that. Paying rent is money you will never get back, compared to a loan, where a high percentage of every monthly payment goes towards the capital, which is your own money.
The market is very dynamic and my advice would be to get in the market and own a property, if you can, rather than waiting for a crazy deal, they don't happen a lot these days.