Canada is growing.
Back in 1871, when the first census was recorded, there were 3.5 million people living in Canada. By the time Canada reached its 100th birthday, its population had grown to 20 million. The 2016 Census reveals that we have surpassed 35 million people – up five per cent from the last count in 2011, and 10 times greater than the first tally post Confederation. This is the fastest rate of population growth among G7 countries, according to Statistics Canada. (source)
Reflective of Canada’s rising population, there are now more big cities. In 2016, there were 35 census metropolitan areas (with a population of at least 100,000, of which 50,000 or more live in the core), versus 33 in 2011. The newest members of the “big city” club are Lethbridge, Alta. and Belleville, Ont.
Even Canada’s small towns are getting bigger, with eight new Census Agglomerations (CAs) counted in 2016 versus 2011, with a core population of 10,000 people or more.
Canada’s three largest CMAs – Vancouver, Toronto and Montreal – were home to more than one-third of the entire population, housing 35.5 per cent, or a combined 12.5 million people.
If you live in one of these cities, or you aspire to, then you already know that these housing markets can be competitive, pricey and, at times, unpredictable in the short term. You also likely know that housing in these markets has historically been a profitable venture in the long term.
And think about it: what other investment vehicle allows you to purchase something and use it daily, while it continues to appreciate in value? It’s no wonder that real estate is a competitive game.
If you’re embarking on this ambitious endeavour, here are some tips for staying cool in a hot housing market:
1. Set your budget and perhaps more importantly, stick to it! Multiple offers may be rolling in on your dream home, but don’t let yourself become a bidding war casualty. A home is only worth so much. It’s up to you to decide what that magic number is.
2. Work with the pros. Your real estate agent, financial advisor/lender and lawyer are your holy trinity – all key resources in the homebuying process. Their job, aside from collecting their fee, is to help you keep your emotions in check and make a purchasing decision based on facts and figures, not emotions.
3. Know when to quit. Just because a competing bid comes in $300,000 over asking (as is commonly the case in Toronto and Vancouver!), that doesn’t mean the home is actually worth that much – and it definitely doesn’t mean you’ll get that return on resale, if that’s what you’re banking on. Make a smart bid that reflects what the home is actually worth. Compare the property you’re considering buying to others that sold in the same area. Your realtor has access to the Multiple Listing Service (MLS), allowing you details on sales volumes, average price and days on market, both by housing type and neighbourhood, allowing you to make a fair offer that you can live with.