Buying a First Home in 2013: How to Make a Good Investment

Buying your first home in 2013 is as exciting as it can be stressful. Those who have been through the process will tell you there is a lot to keep in mind.

First-time buyers looking at the market today will have a completely different experience than those who first purchased a home 5 or 10 years ago. After seeing a rapid rise, housing prices are finally stabilizing. In addition, the number of homes for sale has gone up in many Canadian markets (notably homes for sale in places like Fort McMurray in Alberta).  This means today’s new buyers have the advantage of choice over their predecessors.

In today’s changing market, what do first-time home buyers need to keep in mind over the next months and years?  Here are a few important elements to keep in mind to help you make the best investment:

Buying a First Home in 2013

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1. Interest rates will eventually rise

Despite a shorter amortization period, borrowing conditions are currently favorable to buyers. Interest rates have hit historic lows over the past few months, and new buyers can certainly take advantage of this.

Market analysts estimate that rates will remain low for a few months more. However, what will the situation look like in 3, 4 or 5 years when it comes time to refinance your mortgage?

Interest rates are likely to rise again.  After a drop like the one we’re experiencing, it is an inevitable reaction for which new buyers must prepare themselves in order to avoid unpleasant surprises.

First-time buyers should not only carefully consider their ability to pay off a mortgage, but also ask themselves if they will be able to pay back higher interest rates. Remember that an increase of 1 or 2% can mean hundreds of dollars added to your yearly mortgage payments!

2. Keep your long-term plans in mind when choosing a home

The practice of buying a small condo, living in it for a few years and then reselling it at a higher value in order to move into a house was common practice in decades past. For first-time buyers in 2013, this may not be an option.

Prices are rising, but much more slowly than they did 5 or 10 years ago. Prices have even gone down in certain sectors that are saturated with condos.

Since today’s new buyers can’t count on turning around a property quickly for a profit, it is to their advantage to choose a first home that they can comfortably live in for many years.

3. Evaluate several options before buying

As the real estate market has grown, so has the technology that surrounds it. First-time buyers now have access to more tools that help them find a home best adapted to their needs.

The information buyers need to make the best investment has never been more accessible, and first-timers are better informed than ever about how to conduct real estate transactions.

In a situation where the number of houses for sale is higher than demand, it is in buyers’ interests to use all the information at their fingertips to find the ideal home they’re looking for. Buying a first home is a huge investment, and being able to take your time and consider your options carefully is a huge benefit.

In a buyer’s market, first-time buyers should take the opportunity of visiting lots of properties and considering all the possibilities before buying.

If you’re ready to buy your first home or condo, visit today!

1 comment

  1. Mr Thomas says:

    To have a special interest in property and to buy it for the future investment is not going to work, you have to do some research on the location, budget and area before dealing with it for the future investment.

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