If it’s a question of buying now or waiting, my answer is to buy now.
I’m often asked whether it’s better to buy a property now, while interest rates are higher, or wait until 2024. As someone who is also looking to add more investment properties to my portfolio, I feel very strongly about this question. However, the first thing to consider is the folly of trying to time the market. Attempting to predict when interest rates will drop could result in missed opportunities for appreciation.
Moreover, while interest rates have risen, they remain historically low. Even in the grand history of interest rates, the current 5% rate is still relatively low compared to rates in the 80s and 90s. Therefore, waiting for interest rates to drop significantly might not be worth the wait.
In addition, prices have started to soften in the greater Montreal market. Waiting for interest rates to drop while prices are dropping slowly might not be the wisest decision. Instead, there are more affordable options available for buyers, and this is true whether you’re a first-time buyer or a move-up or move-down buyer.
“It’s a question I need to answer as I want to add more investment properties to my portfolio.”
Lastly, the market environment is more balanced than it was a year ago, with more properties available to choose from and fewer or no multiple-offer situations. As a buyer, it’s more advantageous to buy in a more balanced market with more choices and fewer concessions.
My recommendation would be to get a fixed-rate mortgage for less than three years and reassess at the time of renewal. Interest rates are unlikely to increase significantly in the next few years, but they are also unlikely to drop that quickly either. Given that variable-rate mortgages are not currently attractive, taking a short-term, fixed-rate mortgage and refinancing at a lower rate in a few years is a prudent choice.
If you have any questions about this topic or real estate in general, feel free to contact me by phone or email. I would be happy to serve as your resource for all of your real estate needs.