Varun Kohli September 4, 2022 No Comments

The cooling market continues to put downward pressure on house prices, particularly outside of the GTA. Housing markets in rural, small town, and exurban Ontario, where the COVID fueled back to the land trend raised values most, are now seeing the biggest drops in price. In most of Toronto, the detached home market continues to see price stability. Interest rate increases aren’t making a dent on the demand for the ultimate gold plated real estate asset: a single family home in Canada’s biggest city. For those looking to sell their real estate quickly and who are wary of less market enthusiasm, one option to consider exploring is a Tembo private loan to finance a renovation. This can quickly and effectively raise a home’s value and bridge the gap between an acceptable sale price and falling market sentiment. A recent report released by TD suggests that average national home prices could fall by 20-25% from the COVID frenzy peak to Q1 2023. The report estimates that home sales will go down by 35% over the next 6 months.

TD link this price drop to what we saw in the late 1980s when inflation and high interest rates ushered in the late 1990s recession and a decade of housing price stagnation. At the same time, TD emphasizes that the price decline they predict won’t exceed the housing valuation increases that the pandemic  brought about. According to the U.S. National Association of Realtors, the best renovation options to quickly and significantly increase home value are kitchen upgrades. New marble countertops, state-of-the-art appliances, and energy efficient options will instantly reshape a home. This is the traditional go-to. Installing new wood flooring is another solid option. An upgraded bathroom (or bathrooms) can freshen up a house and increase energy and water consumption efficiency. A basement renovation or transforming an attic into another bedroom or more usable space can recoup the sunk renovation costs. Renovating a basement for rental use can turn a home into an income producing asset to any new prospective buyer and can generate tremendous returns over the long term. It could also open a potential sale to a larger pool of buyers, not all of whom are looking to live in a house but investors who want to rent it out.

Over the long term, a renovation typically pays off. At the end of the day, long term housing demand will ensure that prices will eventually begin to rise again. This is the conclusion of TD’s aforementioned report. Do not underestimate the potential of your home and the home renovation options you have at your disposal in this market. A Tembo home renovation loan can be a complete game-changer that bridges the gap between pre-inflation prices and the reality today.

Leave a Reply

Your email address will not be published. Required fields are marked *