Six words pretty much sum up the Greater Toronto Area's Real Estate Market: Sales are Down, Prices are Up.
Ostensibly, this trend will continue. There is one fear though: the interest rates. If rates change, it will cause a shift in the market. Now there won't be a crash because for quite some time now, we have been 'protected' by the Qualifying Mortgage Rate. (Click Here to learn more about Qualifying Rate). However, a change in mortgage rates will affect the affordability as the Qualifying Rate will also be adjusted accordingly.
Conclusion: Since a stable and a known market generally delivers the expected results, waiting to buy or sell may not be a good idea. The inventory is low. If you are planning to sell, now is the time, as buyers are looking for more options.
How is the Condo Market?
Recently, people have been starting to see this segment as a separate component of the real estate market overall. I don't think it is. Why? Because at the end of the day, it is all housing, and a push in one type of housing affects all other types. But since everyone asks, the condo market is seeing a hold and rent effect. And why shouldn't it?
In the condominium apartment rental market, transactions rose by almost 13% year-over-year in the fourth quarter, while the number of units listed for rent increased by over 17%. Average rents were up on a year-over-year basis for one-bedroom and two-bedroom apartments. So the investor seems to be well taken care of.
The City and its Economy:
It is bright and booming. Toronto's economy is slated to grow 2.8%, up significantly from 1.9% in 2012. This is according to Conference Board of Canada's recent report. In a recent report in a major Toronto news publication, CAW economist, Jim Stanford, stated that Toronto's strength is its diverse economy that includes manufacturing, financial services, tourism, as well as public sector jobs such as specialized hospitals. Also, as the U.S. economy recovers demand for exports, made predominantly in Ontario, will increase.
Manufacturing is rebounding with Ford adding a third shift at its assembly plant in Oakville. As long as there is manufacturing space available the manufacturing industry will continue to make a comeback. Manufacturing output in Toronto is expected to grow by 4.6% in 2013, and over 2014 to 2017, it should increase by an annual average of 2.9%.
Graphs: Check out the following.
Toronto MLS Sales to New Listings Ratio Monthly with 3 Previous Years for Comparison: This chart plots the monthly MLS sales to new listings ratio (SNLR) for the current year and the previous three years. The recurring seasonal trend can be examined along with comparisons to previous years for each month. When the SNLR moves higher, annual average price growth generally increases - often at a rate well above inflation. When the SNLR moves lower, annual average price growth generally declines and can become negative.
Toronto MLS Average Resale Home Price Monthly with 3 Previous Years for Comparison: This chart plots the monthly MLS average home price for the current year and the previous three years. The recurring seasonal trend can be examined along with comparisons to previous years of each month.
Formally educated as an Architect, Jagdeep Singh is a Toronto REALTOR™ consulting on both resale real estate and new developments. Powerful Local Focus on Real Estate with a Global Perspective™
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