Rising prices and interest rates are thwarting the plans of renters who want to become homeowners.
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Isabelle Croteau is currently renting an apartment. Although she made a small profit selling her house a few years ago, she cannot afford to buy a house today.
“The market is crazy. Banks don’t want to lend. You need a good full-time job, and you need it for a long time,” says this woman, who works in customer service in Acton, Montérégie.
However, the former plasterer and mother of two is well paid. But she has to face the facts: Buying a house will be impossible. “The amounts requested are too high. It’s out of reach for people like me,” she says.
Even with a high down payment
A few months ago, Valérie Lapointe was finally ready to leave her apartment to buy a property in the Repentigny neighborhood or in L’Assomption. But the 43-year-old quickly became disillusioned when she began her research.
“I had the funding, a large down payment, everything was fine. But the prices made no sense! Even when I returned to L’Épiphanie or Saint-Sulpice,” she says.
Valerie Lebrun David Descoteaux
The lowest prices she found were around $290,000 or $300,000 for a condo, sometimes double that of a townhouse. “The only houses that were offered at my prices, there was a lot of money for repairs. For some it was necessary to completely redo the piles of the house or the roof,” explains the man, who nevertheless earns a salary of between 70,000 and 80,000 US dollars, depending on the year.
“I might have gotten there by tightening my sacred belt, but I saw what was coming, that interest rates would keep going up, and that could be dangerous,” she said. Valérie finally found a place to live, four and a half, that cost her $1,100 a month. “It’s still expensive, but it’s in a good location and I like it, so I’m happy with it for now. I’ll see next year if the market calms down a bit.
- Listen to Alexandre Dubé’s interview with Ghislain Larochelle, real estate columnist at the Journal de Montréal and Journal de Québec QUB radio :
Lots of obstacles
Many Quebecers are going through the same situation as Isabelle and Valérie. In fact, a new Royal LePage poll by Maru/Blue shows that as of July 1, 35% of Quebec renters, nearly 750,000 of them, have considered buying a property rather than renting it. For many of them, the obstacles are numerous. For 57% of respondents renting on July 1, 2023, financial issues are one of the top reasons behind their decision to rent instead of buying a property this year:
- 24% chose to wait for property prices to fall
- 15% chose to wait for interest rates to fall
- 10% did not have enough deposit
- 8% were not entitled to an adequate mortgage
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