Real estate has long been a sellers' market in many places across Western Canada, yet rising mortgage rates and more stringent stress-testing rules are now impacting the purchasing power of prospective buyers.
While meeting the threshold of eligibility for a traditional mortgage has become more challenging, this shouldn’t discourage Canadians from participating in the real estate market, advises Pip Dhaliwal, Owner and CEO at Freedom Capital, one of the largest national brokerages serving the alternative and commercial mortgage market in Canada.
“Even though interest rates are higher, and it may be more difficult to qualify for a mortgage from a conventional lender, real estate is still a good long-term investment that offers solid returns. And people can still find ways to advance their goals,” he says. “Since the market has slowed down a bit, this might even make it easier for investors to negotiate and land on a deal that’s right for them.”
Efforts to participate in what is now “a more balanced market can pay big dividends, especially in a changed environment, where the number of bidders may be higher than in the past,” Dhaliwal explains. “At times when many people are being more cautious, the entrepreneurs and risk-takers can really take advantage of the situation and reap a lot of benefits.”
For better outcomes and to manage risks, Dhaliwal suggests enlisting professional help. At Freedom Capital, for example, clients can discover a range of financing options in honest and upfront consultation with the team. And a streamlined approval process enhances access without excessive documentation.
“We try to make it easy for people to look at their existing assets and see what they can achieve, for example, with non-traditional financing,” he says. “But it’s important to have a solid plan.”
Clients who already own real estate can leverage the value of their property to finance a new project or development. Strategies can include buying a property that generates rental income or securing a commercial property with a down payment until zoning changes have been approved – and development can commence, says Dhaliwal.
“We can help with land acquisition, construction, alternative financing, first and second mortgage financing, investment financing and purchase financing,” he explains. “We can also point clients to opportunities for utilizing tax advantages.”
Enabling such a comprehensive approach is the team’s collective 35+ years of experience in the mortgage lending field plus extensive market knowledge, including an understanding of the rezoning and construction cycle, says Dhaliwal. “We consider all our clients’ assets to enable them to move forward. We see more and more people in need of alternative lending opportunities, especially those looking to finance development.”
Even for first-time homebuyers, Freedom Capital can offer help for gaining entry to the market by leveraging other assets through family and friends. “Many of our clients are able to tap into existing equity,” he says. “Non-traditional financing can provide them with the options they need when they’re looking to invest.”
This dedication to helping Canadians realize their dreams of homeownership comes from the desire to see both clients and local communities thrive. And what makes Freedom Capital uniquely positioned to deliver on this goal is the teams’ ability to create road maps for making the real-estate journey easier – and lead to success.
“Don’t be frightened off by uncertainty,” Dhaliwal says. “Markets are prone to changes and rates fluctuate – but growing your real-estate portfolio still promises good returns in the long run."