2018 was a year of slowdown on the Toronto housing market scene thanks to a number of factors including the financial stress test that was introduced at the beginning of the year and the non-resident tax that pushed several foreign buyers out of the market. Toronto housing prices dropped on some types of housing but continued climb higher in others, particularly in the condo and rental markets as more Torontonians sought out more affordable homes and drove up demand for these units.
So what does 2019 hold for the Toronto market? Here are some of our predictions.
- Toronto’s tech market will drive prices higher.
Since 2012, Toronto has seen an increase of more than 82,000 jobs in the tech sector. That is more Silicon Valley! And according to CBRE, Toronto now ranks fourth in North America as a tech hub. And now with companies like Microsoft and Intel setting up shop in the GTA, you can expect that even more high paying jobs in the area will keep prices high and even cause them to climb as more professionals look for housing in the city.
- Increased immigration will impact demand.
Another factor that will continue to impact the Toronto housing market this year will be continued high numbers of newcomers moving into to metropolitan cities. According to Statistics Canada, we can expect as many as 330,000 immigrants to settle in Canada this year.[i]And since they will all need a place to live, demand for housing is going to rise.
- Higher mortgage rates will affect affordability.
Despite the fact that the prices of single family homes has fallen in Toronto over the last year to an average $765,000, these home still remain out of reach more many citizens due to Bank of Canada interest rates going up multiple times in 2018. As a result, home affordability in Toronto is at a 25 year low.[ii]
- A slowdown of new housing starts will impact supply.
2018 saw a considerable drop in construction of new homes in the GTA. According to TD Bank, new urban construction scaled back between 35,000 and 65,000 units across the province.
- No housing crash is in sight.
For years, doomsday prophets have been predicting a housing crash in the Toronto market. But given how strong the market currently is despite its challenges, that seems unlikely. In fact, according to the CMHC, there is unlikely to be much market fluctuation at all.[iii]
What does all this mean for you?
If you are thinking about selling your home, it certainly looks like 2019 will be a good year to do so. With supply dropping and demand rising, we predict that we will be in a sellers’ market for some time to come.
If you are a buyer, things may be a little trickier for you as you are likely to find yourself in competition with many others looking to get in on a piece of the action in the Toronto housing scene. Nevertheless, if you can afford it, buying a home now could be a smart decision as prices are likely to rise for some time to come.
If you would like to discuss buying, selling or renting in the GTA, we would love to help you. Give us a call today to arrange an appointment.