October Rate Increase
5 ways to offset costs
No one wants to hear this, but the slight rate increase could temporarily be a good thing for Alberta's economy. Realtors can see first hand how much buyers are willing to overpay for homes in Calgary, sometimes as much as a half a million dollars above what anyone would consider a reasonable market value.
Oil and Gas
We cannot predict when the global energy market will settle down, so having some guardrails against runaway inflation is a good thing right now. The Bank of Canada can lower its policy rate again when economic conditions and inflation allow. In the meantime, the October rate increase slightly cools excessive spending to hopefully maintain a healthier, more balanced housing market in Calgary.
What to do next
It would be wise to plan ahead and prepare for the possibility of further rate increases rather than assuming borrowing costs will come down soon. Here are five ways to offset costs while still building wealth in turbulent times.
Buy a little bit less house
If you can live in a home without the extra guest room or finished basement, it could be a good idea to avoid stretching your budget to the maximum amount your lender will approve. If the kids are small, there is nothing wrong with them sharing a room if it works for your family. Buying within your comfort zone leaves more room in the budget for unexpected expenses and future rate changes.
Buy luxury adjacent
You would be so surprised by how much prices can vary just one street away from a luxury neighbourhood. You may still enjoy nearby green spaces, parks, and amenities without paying the premium for a prestigious address. It's worth exploring the surrounding streets before ruling out an area you love.
Find the best street
If living in a particular neighbourhood is non-negotiable, the old advice to “buy the worst house on the best street” can be worth considering. This can be especially appealing if you're looking for access to a particular school or want to be close to established amenities. Just make sure the home has sound fundamentals and that any renovations fit your budget.
Buy a fixer-upper
If you are handy and prepared to manage renovations, permits, and licensed contractors where needed, you can improve a home as you live in it and spread some of the costs over time. It's even better if you can restore original features in older homes, where character and craftsmanship can be a real draw for nostalgic buyers.
Consider a Legal Suite
Buy a home with a basement that may be suitable for a legal secondary suite. Basement suites are a popular option in Calgary, particularly in desirable neighbourhoods where rental housing can be hard to find. A legal suite can help offset your mortgage payments and attract better tenants wanting to live in the area.
We look for suite features that make the space inviting, including a separate entrance, legal egress windows, heated flooring, and separate laundry facilities. South-facing windows are an added bonus, as natural light can make a basement suite feel brighter, warmer and more welcoming to tenants.
You can sometimes find a home with an existing legal suite, or look for a property with the potential to add one. Before making an offer, check zoning, permits, building-code requirements, and renovation costs. The right property could give you a comfortable home upstairs and a reliable source of rental income downstairs.
Talk to the pros
As real estate agents, we can help you explore more affordable housing options and spot opportunities you may not have considered. Before making an offer, talk to a mortgage broker about affordability and financing, consult your tax accountant about the implications of rental income, and seek legal advice about your responsibilities under Alberta's residential tenancy laws.
Contact
The right home might be more affordable than you think! It takes is a little creativity, expertise, and tenacity to uncover opportunities that may have been overlooked. Let us help you find the right home for your budget, lifestyle, and future in Calgary.
Buyer and Seller Real Estate Agent: This community guide is maintained by Albertine Huizing, a licensed REALTOR® with Magnolia Group at First Place Realty. Specializing in historic inner-city Calgary character homes and preserving Calgary's vibrant communities. Providing a personalized experience is my priority, all client consultations and private home viewings are arranged exclusively by appointment. Please call or text +1 403-471-7587 to connect directly. Registered brokerage office address: 1822 10 Ave SW #305, Calgary, AB T3C 0J8.
