As we near the fourth quarter of 2024, I, your local Kamloops mortgage broker, want to help you be prepared for the year ahead. The Canadian real estate market is on the cusp of a significant shift. As we approach 2025, homeowners, especially investors and those with second homes purchased during the COVID-19 pandemic, may face a challenging reality. Rising interest rates are set to dramatically increase mortgage payments, potentially making those once-affordable properties a financial burden.
The Ticking Time Bomb
Many homeowners are sitting on properties purchased during the COVID-19 frenzy when low interest rates and high demand drove prices to record highs. With rates nearly tripling and the market cooling, these properties may no longer be financially viable. The prospect of hundreds, even thousands, of dollars in additional monthly payments is forcing many to rethink their strategies. While mortgage payments are currently holding, household debt appears to be a different story.
A Flood of Inventory?
Some may be forced to sell as homeowners grapple with higher payments, potentially flooding the market with inventory. However, with rates hovering around 4.5%, the current market drastically differs from the COVID-19 boom. The demand for second homes and rental properties has dwindled, and buyers are scarce.
The Rental Dilemma
Selling a rental property with existing tenants poses additional challenges. Strict regulations protect tenants, making it difficult to increase rents or evict them to facilitate a sale. Potential buyers would need a substantial down payment to make the numbers work or be willing to purchase the property for owner-occupied use.
Prepare for the Future
As a mortgage broker, I must guide you through these turbulent times. While I can’t offer a one-size-fits-all solution, I can personally assess your situation.
A Complimentary Review
I’m offering a complimentary review of your mortgage and property outlook for 2025. Together, we’ll explore your options, whether it’s renewing, refinancing, or selling. Let’s give you the time and information to make informed decisions about your financial future.
Remember: Every situation is unique. Let’s work together to navigate the changing market and ensure your financial well-being.
