What will the real estate industry look like in 2021?

If there is one word that defines life in 2021, that word is change. How much and for how long is uncertain. And while some changes may be temporary, many may be here to stay.

How will all of this change impact the real estate industry? Some key trends have emerged that bear closer scrutiny.

Residential Real Estate

With more and more people working from home and the potential of many continuing to do so in a post-pandemic world, there is an increased need for more space. Enter suburbanization. Residents living in major urban centers are steadily moving to suburbia. Will suburbs become 18-hour cities? Who knows? One thing is certain, living cheek to jowl with thousands of other people is no longer a viable option for many.

Office Space

For a while now, open-concept office space was the trend. That trend is now dead. While it allowed companies to downsize to smaller properties since less space was needed, after COVID-19, once workers begin to return to the office, we may see a return to traditional working spaces and the need for larger office buildings to accommodate them.

Retail Space

Bricks and mortar businesses have been hit hard and have seen a sharp decline in sales. Many big-name brands that previously anchored large retail spaces have permanently shut their doors. What does this mean for shopping malls? Will they survive? Experts suggest that to do so, they will have to be creative and embrace change. Think more medical clinics and multi-family residential homes rather than clothing stores with multi-user fitting rooms.

Proptech (Property Technology)

The real estate industry was on the brink of widely embracing proptech before the pandemic hit. That acceptance has accelerated like a rocket. In order to stay engaged with customers, service their needs and remain in business, companies have been forced to innovate in order to survive. This embrace of innovation will help to stabilize many sectors once the pandemic is behind us.

Written by FCT

Buying your first home is a substantial financial investment. For this reason, it’s essential to arm yourself with adequate information and a solid plan to help you balance your debt, income, and expenses. Contact us to learn more.

Here are a few tips you should know before applying for a first-time home buyer loan.

Saving a Down Payment

If you’re buying a home, focus your efforts on saving a minimum of 5% of the home’s price. Making a larger down payment lowers the loan amount you need to pay and will also decrease your monthly payments.

With a down payment of less than 20%, your first-time home buyer loan will require mortgage default insurance, which will be factored into the loan amount. Having 20% or more down payment saves you from paying default mortgage insurance.

Passing the Mortgage Stress Test

A stress test helps you determine how much you can afford when your circumstances change. What happens if you lose your income? What happens when the interest rates increase? The stress test also helps lenders determine if you can afford to pay off your first-time home buyer loan at a higher rate than you would pay.

Usually, being able to pay at least 2% above your contracted rate is sufficient to prove that you can afford your mortgage. Your income should be high enough, or your debts should be low enough to enable you to qualify for your first-time home buyer loan.

Whether you pay mortgage insurance or not, the stress test applies. Therefore, taking the time to analyze the mortgage you can afford with and without your current income is essential.

Timing Your Application for the First-Time Home Buyer Loan

As soon as you have decided you want to purchase your first home, talk to a mortgage broker and get pre-qualified. Your broker will let you know if there are any obstacles you need to overcome before you can get approved for a mortgage. It is never too soon to take a quick look at your financial picture to make sure that home ownership is in your future.

Applying for a Mortgage when You are Self-Employed

Whether you are incorporated or a sole proprietor, expect to provide extra documentation when applying for a mortgage. All lenders within Alberta require that your income taxes are filed and up to date. Any other bookkeeping or documentation should be readily available.

Getting Your First-Time Home Buyer Loan

It’s advisable to consult a Dominion mortgage broker to help you review your financial situation. With the right analysis, you can plan your first-time home buyer loan, and ensure that you tick off all boxes with your lender in Edmonton. Book your appointment with us today!