It’s December, which means—after endlessly recounting “the year that was”—media outlets are going start predicting the year head. And more often than you’d like to hear, they’re going to predict the future of real estate.
There is arguably no industry more prone to future-gazing than the mortgage industry. This article in the Globe, for instance, predicts:
- More Canadians will be going variable in 2019;
- The mortgage stress test is going to become less stressful;
- In-branch mortgage sales are going to decline;
- HELOC holders are going to have a tougher time getting a mortgage on a second property; and
- Bots are going to start offering mortgage advice.
While these are interesting guesses, in many cases they’re just that—guesses. In other cases, they’re just basing predictions off of things that are already happening. For instance, while it’s true there are signs “economic weakness is mounting”—indicating the Bank of Canada may have to stop raising interest rates, making the variable rate more attractive—no one knows for certain those signs will actually come to fruition. In the same token, yeah—existing HELOC holders that want to place a mortgage on a second property might have a hard time in 2019, because in 2018 Canada’s two biggest lenders (Royal Bank and TD) changed the rules around how they evaluate such mortgage applications. So that’s, like, already happening.
It definitely doesn’t hurt to educate yourself on mortgage trends when preparing for acquiring a mortgage or mortgage renewal. Just don’t hang too much on these predictions—because market forces can change all too swiftly.