Welcome to our first blog posting! It's 2010 and the real estate market in Durham Region is about to explode. "Why?" you ask. Read on...
People who are buying and selling homes this year are about to receive a double hit to the pocketbook after July 1, 2010. The first hit will be in the form of the HST (Harmonized Sales Tax) which will be applied to a number of services related to the home buying/selling process as of July 1, 2010. For example, on an average priced home in Durham Region ($250,000) the additional costs to a seller will be upwards of $1000. For the buyer of this home, the additional costs are estimated to be $500.
The second hit will be to those home buyers who require mortgage financing. Over the past few months the media has repeatedly reported that the Bank of Canada plans to increase the prime lending rate in the second half of 2010 which will in turn affect mortgage rates. Assuming a 1% increase in mortgage rates, the additional cost to a Buyer who needs $100,000 of the bankís money will be $698.40 per year based on a mortgage that is amortized over 25 years. Over the life of the mortgage, thatís an additional $17,460.51 of interest payments. Ouch!
There is no doubt that these factors will spur real estate activity in the first half of 2010. Will you be ahead of the crowd or scrambling to catch up?