Are we becoming overly confident in dismissing the existence of the mortgage cliff? Have we already hit rock bottom? While there have been reports of price increases in certain areas, you might find yourself wondering, “What am I missing?”
The answer is complex, but to simplify it, the key factor at play is supply. Open houses recently have witnessed strong attendees, but the influx of new properties hitting the market has been limited. When supply is scarce, healthy competition always becomes the norm.
Now, let’s delve into the mortgage cliff. According to data, a significant portion of fixed loans are set to expire between June and December this year. This means that many borrowers will transition from their current 2% fixed rate to a higher 7% rate. The question arises: What does this mean for the Spring Market? While some individuals will easily adjust to their new mortgage repayments, many others won’t. Could this create the perfect storm we’ve been warned about? Are we standing in the eye of a tornado?
It’s up to you to decide. As these distressed sellers enter the market during what is already considered a peak season for new listings, we can anticipate an oversupply. However, the magnitude of this wave and the extent of its impact remain uncertain. Only time will reveal the true consequences.
In light of this situation, my recommendation is simple: If you’re contemplating selling your property, now is the opportune time to act. With favourable supply – demand and a neutral media sentiment, why not now?
