Looking to buy a home this spring? Here's what you need to know
As B.C.’s real estate market continues to be driven by the record pace of sales in 2021, we are now entering the typically active spring market. Although the market has steadied from last year's heightened activity, demand remains strong as pandemic influences continue to shape our wants and needs when it comes to our homes. For those looking to enter the market, here’s what to expect from this year’s spring market.
Buyers should anticipate the effects of rising interest rates
With 2022 shaping up to be another active market, one thing buyers should take note of this spring is the effect of rising interest rates. In March 2022, the Bank of Canada raised its benchmark interest rate to 0.5%, with a further increase of 0.5% to 1% in April, moves that are expected to be the first of many small rate hikes throughout the year.
First-time buyers will likely feel the largest impact, as their buying power will be diminished with every rate hike. So how can first-time homebuyers start thinking ahead and find their place in the market? The answer is to start acting now. With additional rate increases on the horizon, first-time buyers should start thinking ahead about how they can get into the market and lock in a rate today to protect themselves against rate hikes in order to get the most out of their purchasing power.
“For first-time homebuyers looking to purchase a new development, they should also check if there is an option for a blanket appraisal, which allows the purchaser to hold the lower rate for 24 to 36 months until the project is completed, as opposed to regular approval or pre-approval that would hold the rate for an average of 3 to 6 months,” shares Jamie Squires, president of Fifth Avenue Real Estate. This helps buyers not have to worry about the rate increases when the development is complete and move-in ready, ensuring that they get full mortgage approval with the rate held.
Expect remote working to remain a trend even as COVID-19 related restrictions ease
As remote working has become the new norm and many businesses have adapted to a hybrid work environment, Canadians are no longer tied to living nearby their work anymore. “Now, buyers are compromising on location to get more space within their budget,” says Squires. “We’ve seen a big shift where people are moving further out from the city as they consider buying a home in an area where natural amenities are close by. It’s all about where the home is located and being part of a community that feels right for them.” As people spend more time at home, a trend towards a greater emphasis on the community and local amenities is natural.
Functional home design, sustainability and outdoor amenities will be key drivers of demand
When it comes to home design trends that have emerged from the pandemic, having an office space at home is undoubtedly the biggest demand for many buyers. “Working at a kitchen table is no longer an option as remote working has transitioned to a permanent shift for many. The need for functional and flexible living spaces is crucial to new developments as buyers look for space to transition into a home office, studio, meditation space and more.” says Tony Zarsadias, CEO of Island Realm Real Estate.
Lifestyle elements such as outdoor recreation and proximity to nature are important factors for today's buyers, particularly in the Okanagan, where there is plenty of sunshine year-round. “With new developments, there is a big focus on amenities offered to residents. Close proximity to walking and biking trails, outdoor pools and dedicated outdoor space for BBQs and firepits should be top of mind for developers when designing new homes in the area,” says Shane Styles, president of Epic Real Estate Solutions. “As many residents live an active lifestyle, in-suite or out-of-suite storage space for bicycles and snowboards is another important consideration for developing new homes in the area.”
In 2021, B.C. experienced an intense heatwave that affected many across the province, sparking a desire for homes that seek to address the effects of climate change. “Our perception of luxury has evolved—in addition to the desire for high-quality materials and finishings, homeowners are placing increasing value on sustainable design elements and green building and operations programs like Passive House, LEED, Boma Best, FitWel and the highest level of the BC Energy Step Code,” says Jacky Chan, CEO of BakerWest Real Estate Inc. With buyers continuing to prioritize sustainability and health, homes that both enhance our well-being and are good for the planet are expected to be significant drivers of demand.
As B.C. continues to be a top area for local and intra-provincial home buyers, we expect an active spring market, although the numbers may not break a number of all historical record highs set a year ago.