Real estate in 2021 was a year like no other in history for Kingston and area and we can confidently say that that was the case for most of North America. Low inventory, record number of buyers, increased sales, low interest rates, and record selling prices.
2022 has started out much the same. The question that is on the minds of most is whether the year will see change. What we do know is that there have been lots of rumours about what the government is considering.
One thing for sure is that interest rates are going up. The talk is that we will see a .25% increase starting over the next week and another .50% by year end. The best course of action is to understand how this will affect you. For some who purchased 5 years ago, and your mortgage is coming due, your rate may actually go down. For new mortgages, the qualification rate remains at 5.25%.
Combine interest rate hikes with the estimated 8-10% increase in housing prices for 2022 that the “experts” are talking about, this will make home buying increasingly more difficult for many.
Realistically, there is not much to purchase under $400,000 anymore in Kingston. The competition remains fierce, and most are firm sales (no conditions). Creative thinking may be required for buyers looking to purchase their first home… whether it be the bank of mom and dad or another family member! The use of private money is on the rise.
So, the magic question remains… will the interest rate increases affect the market enough to slow it down? My thoughts, no! There are just too many buyers to pick up the slack. Some of the rumours and controversial ideas have been to tax the investor type or foreign buyers. “Work From Home” has obviously been a major factor for people’s decisions to move… should they be taxed. This obviously will never happen but what we do know is that something needs to give.
2022 will be just another level of craziness which I’m not looking forward to.