Toronto Real Estate Market In 2015 To Date
January Real Estate Sales
The real estate market in Toronto came out of the starting blocks in spectacular fashion in January, with GTA realtors reporting 4,355 sales through the MLS in the first month of the year. This represented a 6.1% increase from the same period in 2014. New listings increased by 9.5% during the same period, indicating that there remains options for home buyers looking to make a real estate investment.
On the price front, the average GTA sale price in January was up 4.9% to $552,575, which is good for home sellers, but not so good for home buyers. TREB market analysts forecast that lower home borrowing costs this year will continue to keep the market strong and affordable for buyers, but that the majority of price appreciation is likely, like last year, to occur in the low rise market (i.e. townhouse, semi and detached).
The average sale price for detached homes in the GTA in January was $716,125, semi-detached was $520,510, townhouse was $440,458 and condominium was $358,823.
Mortgage & Interest Rate Trajectory for 2015
The Canadian interest rate environment will inevitably be influenced by the American market, although Bank of Canada Governor Stephen Poloz has insisted that Canada will follow its own path. He has recently had to explain to other G20 Central Bank Governors whether he has in fact been trying to talk the Canadian $ down, which has been the speculation. Mr. Poloz insisted that this was not the case, and that his recent 0.25% rate cut in January was purely a reaction to support an economy hurt by lower oil prices. Since that January cut, the odds have been that he would cut the rate again by another 0.25% in March, but recent his recent comments have reduced the potential of that happening until the Bank has more data to evaluate the impact of its January cut. The Canadian banks only passed on 0.15% of the 0.25% January cut to borrowers, when they recently cut the prime rate to 2.85% from 3.00%.
Should Rate Speculation Impact Your 2015 Home Purchase Or Sale Decision?
In a word, no, I don’t believe a buyer or seller should make their decision in 2015 based on whether rates fall a little more or not. Ultimately, one should make the decision based on one’s personal lifestyle circumstances. If rates decline in the next month, they will inevitably be by a very small amount. Conversely, if rates increase at the end of the year, it will also be by a very insignificant amount.
I don’t advise people to try to ‘time the market’. Rather, base the decision on your own personal family circumstances. Inevitably, you will end up ahead if you follow that path.
Ram Rajendram is a Toronto Real Estate Broker with Century 21 Harves Realty Ltd., Brokerage. He sells condos & houses throughout the GTA & assists home & condo buyers with their purchasing needs. He is also a Canadian Chartered Accountant (CA) & holds a Bachelors Degree in Economics from the London School of Economics (LSE)