Toronto Housing Market Cool Down Only Temporary
There are all kinds of speculations out there right now concerning the Toronto housing market. For years, various talking heads have been telling us that we are in a “bubble”. Despite these warnings however, home prices have continued to rise across the GTA.
Only within the last month or so, have we seen the appetite of buyers begin to ebb a little – and some are taking this as a sign that the housing bull market is finally coming to an end. We would suggest however, that this cool-down is only temporary and that buyers will be out again in full force in the last quarter of the year.
Let’s take a look at a few of the reasons why we believe the Toronto market will heat up again in the latter part of the year:
- Housing is still in short supply
The fact of the matter is that there are still many ‘would-be’ home buyers in the Toronto area. Some buyers have temporarily given up the search as home prices have been surging over the past year. Now that the bank of Canada has increased interest rates, some sellers are lowering their asking prices in order to pique the interest of buyers.
According to Harvey Kalles Real Estate agent, Brandon Weiss, “there’s still very limited housing supply, and with so many buyers taking a hiatus from house hunting for the summer months, we are set to see them all flood back to the market in the fall creating even more demand than prior to the new Ontario housing regulations. With increased demand and no additional supply, it leaves little question as to where prices will go”.
- Buyers will gain a better understanding of new housing regulations
The rapid rise of housing prices across the GTA has led the Government of Ontario to impose a number of measures including the adoption of a foreign buyers’ tax in order to help stabilize the market. There were also changes to mortgage rules for first time home buyers.
Unsure of how the new regulations would affect them, some would-be buyers have temporarily withdrawn from the market.
Mark Adelson of Havey Kalles says, “we saw similar rules implemented in Vancouver to slow down the housing market, but those rules had a temporary impact. Soon enough, buyers in Toronto will see how the rules don’t really apply to them and so they will get back into the market. When that happens, we will see an upwards trend in prices. I do think the mortgage rates increasing and lenders becoming stricter will help slow the growth a bit, but if you’re a buyer in Toronto, now is your opportunity because I believe by mid to late September, the market will go back to being a sellers’ market.”
- Some sectors of the market are still hot
It is important also to note, that the Toronto housing market has not cooled down across the board. While single family homes may be in a temporary slump, the condo market is hot and new construction sales are at an all-time high.[i]
This suggests that the competition amongst buyers is still very strong. It is likely that we will see them become more evenly distributed across the broader housing market in the near future.
If you are interested in buying or selling a home in the Toronto area, opportunity is still very good. Contact us to learn more today.