The way Canadians buy and sell property has changed dramatically over the last couple of years. Ratehub.ca spoke to Chad Griffin, co-founder of The Housing Block, on how much the internet has transformed the home buying process for the better. Web portals such as www.housingblock.com are dedicated to enhancing the online real estate buying and selling experience for Canadians.
Question: How do you think the Internet has changed the way Canadians buy their homes?
I believe the Internet is a powerful tool that has enhanced the home buying experience. A buyer is now empowered with extra information that allows them to make a better decision on their purchase. With a significant number of quality real estate resources online, homebuyers can easily access detailed neighbourhood data. This data encompasses many variables, such as access to schools, shopping, parks, etc. Homebuyers can also access comparable homes, maps, virtual tours and slide shows that provide them the opportunity to view a potential new home from the comfort of their own home. This type of information is vital to buyers during the initial search phase, because it enables them to find the neighbourhood is right for them. Prior to the Internet, this information was controlled by the real estate industry.
Question: Websites such as MLS® and HousingBlock.com provide a transparent window into real estate information. Why is this important?
The details on a house for sale should never be hidden from a buyer. I feel that it’s important to provide all of the property information to the user upfront. The focus on marketing should be solely about selling the property and ensuring that you are honest and providing all the available information about the house; this will help homebuyers make informed decisions.
Question: Do you think the new tighter mortgage rules will have a significant impact on the Canadian housing market?
I think the new mortgage rules will have a positive impact on the Canadian housing market in the long run. The change in the maximum amortization period will have the most economic impact. I don’t believe tighter mortgage rules will be 100% bad news for homebuyers as some think. After all, it means homeowners will pay down their mortgages faster while paying significantly less in total interest costs. In terms of a downside, a number of homebuyers will be unable to enter the market until a later period in their lives, which will also impact the kind of housing they can afford.
Question: The fate of the Canadian housing market is a bit murky. Some believe we are in for a soft landing, others say we are destined for a full-blown U.S.-style housing crash. What are your thoughts?
I do not feel that we will see a major housing crash in Canada like the one the U.S. experienced. Although, the Vancouver housing market has cracked, and if any other Canadian city follows, it will be Toronto, starting with the city’s overheated condo segment. With the current number of condo units that are under construction, plus many others in the approval process, Toronto may be getting ahead of the demographic count. Some investors may be looking to cash out before experiencing a decrease in their property value. If Canadian mortgage rates do not rise too quickly or too aggressively, and the housing and condo supply does not begin to outpace demand, then we will be in for a soft landing.
Question: A recent report revealed consumers are split down the middle on whether they should purchase sooner or save longer for a larger down payment. What do you think would serve the economy better?
Generally speaking, I think with the uncertainty of where interest rates are heading, it would be ideal for first-time homebuyers to save longer for a larger down payment. This, in return, will assist with reducing buyer’s mortgage amount from day one, minimizing the amount they will incur in mortgage insurance premiums if you have a high-ratio mortgage.