What does 2017 have in prospect for Toronto’s overheated real estate market? What can you look forward to if you have a property for sale in Toronto, Canada?
We are already into March, 2017, and it seems that the incredible pace set by the Toronto housing market continues unabated. The government is doing everything it can to cool down sentiments before this develops into a fully blown housing bubble, but to little avail.
As the Toronto-based real estate analyst, John Pasalis explains, "As the craziness continues, I suspect that might trigger some bigger changes. I suspect that Ottawa or the province are only going to be fine with 30 per cent year-over-year appreciation (in housing prices) for so long before they do something else that's drastic."
So what can you expect if you want to sell your house in Toronto, Canada fast? Here are the things to watch out for.
Unintended Consequences of the Donald Trump Presidency
Already, the election of Donald Trump as the President of the United States has had a massive bearing on the real estate market in Toronto. There is a growing belief that the US economy will do much better under President Trump than it has in the past few years.
This would put a pressure on the US Federal Reserve to raise interest rates, and when that happens, Canada would be forced to raise its own mortgage rates. The higher interest rates will make it much more difficult for first-time homebuyers to buy an apartment in Toronto online.
Already the average home price in Toronto is over $1.1 million. This is well beyond the means of most ordinary Canadians. Any increase in mortgage rates will make it impossible for most people in the country to be able to buy property here.
That will leave homebuyers with little choice but to look elsewhere. As Jason Mercer of the Toronto Real Estate Board (TREB) explains, "If you were thinking of buying a single detached home in Toronto, maybe now you're looking at purchasing in one of the surrounding regions or you're going to change both your home type and the geography you're looking for."
The Supply and Demand Mismatch
There is a serious shortage of housing stock in Toronto. There just aren’t enough resale properties on the market. New homes for sale on the market are even fewer.
This has created a dangerous demand/supply mismatch. The demand is as high as it gets and it continues to grow with tens of thousands of immigrants from countries such as India, China and the United States, moving to Toronto every year. This has led to bidding wars and multiple buyers competing to buy a property, which has only served to push up the prices.
Fewer First-time buyers
First-time buyers are not that involved in the market anymore. Many have been put off by the high property prices and are simply unable to put their finances together to buy their dream home.
Many are looking for homes outside the Greater Toronto Area (GTA), where properties are more affordable. Even the generous tax rebates offered by the government do not seem to excite them.