toronto real estate market

Toronto Real Estate Market Update for December 2018

Toronto Real Estate Market Update for December 2018

What happened in December 2018 and what can we see for the 2019 Toronto Real Estate Market.

Toronto Real Estate News October 2018: What Most People will Miss from the Data!

Toronto Real Estate News        October 2018: What Most People will Miss from the Data!

Toronto’s October real estate numbers are out, and here’s what everyone’s missing.

Sept 2018 Toronto Real Estate News - One Incredible Opportunity Many Will Miss

Sept 2018 Toronto Real Estate News - One Incredible Opportunity Many Will Miss

The Real Estate News for September is out. Did you see the opportunity that many will mis?

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Waiting for Toronto Real Estate Market To Crash?

Waiting for Toronto Real Estate Market To Crash?

Are you waiting for Toronto’s real estate market to crash? Here are your options.

How to Buy an Investment Property In Toronto When Prices Are So High!

How to Buy an Investment Property In Toronto When Prices Are So High!

Toronto’s real estate market is one of the most expensive markets to invest in across the country, so is it time to bail out and invest in other cities? 

2017 Wrap Up & 2018 Predictions for Toronto's Real Estate Market

2017 is in the books...so how did Toronto's real estate market pan out? Let's recap the events of a busy 2017: Toronto's real estate market started on fire with record sales and price appreciation right after New Years. A warm winter helped in getting buyers out and sellers motivated to cash out.

On April 20th, the provincial government announced the Fair Housing Plan which took steam off Toronto's real estate market. Buyers and sellers sat on the sidelines till September to let the impact of the new regulations work through the market.  With the fall market official kick off after Labour Day, the number of properties listed for sale increased, however not to the level expected. The number of listings increased significantly in November and December as sellers rushed to list prior to the new mortgage rules, stress test, kicked in effective January 1, 2018.

Overall, Toronto's real estate market in 2017 was the fourth best year in sales since 2002.  It started as a very strong sellers market, then levelled off as a balanced market with the exception of the condo sector which remained strong throughout the year since it's pretty much the only affordable option to live or invest in the city.

2018 Predictions for Toronto's Real Estate Market

I believe the regulators and governments are done introducing new rules such as the non-resident speculative tax of 15% and new stress test mortgage requirement for buyers with 20% or more downpayment. These government and regulators changes will work their way through Toronto's real estate market in 2018. This is the year of Bank of Canada and the bond market.

Bank of Canada sets the benchmark rate which impacts the cost of borrowing for variable mortgages and lines of credit whereas the bond market drives the cost of fixed mortgage rates.  Last year the Bank of Canada increased its benchmark rate twice and it's anticipated they will do the same in 2018 as well.  With lower unemployment numbers (more Canadians employed) and average wages increase, inflation will be the factor Bank of Canada will attempt to control. The X factor is NAFTA negotiations and the negative impact on the Canadian economy if the US decides to walk away from the agreement.

Toronto's real estate market in 2018 will probably be in a balanced territory where buyers can negotiate, where sellers expectations are not through the roof....with the exception of the condo market which I anticipate to continue to be strong and appreciate in the 8-10% due to affordability and some buyers getting pushed down because of the new mortgage rules and higher interest rates.

For real estate investors, Toronto's real estate market will present opportunities for increased rental demand for 2 reasons: cost of borrowing is higher and it's tougher to qualify for buyers.  However, real estate investors need to be cautious since it will cost them more to carry an investment property which reduces cash flow requiring larger downpayment (capital) into the investment property. Investing in areas with strong potential growth (masterplanned communities, infrastructure investment such as transit or schools and close to where jobs are or will be) is more important than ever now that the cost of borrowing is higher.

4 Ways Real Estate Investors Can Mitigate Risks of Rent Control Introduced in Fair Housing Plan

Toronto's Real Estate Market

Toronto's Real Estate Market

 Rent Control Will Increase Rents!

In summary, here are 4 things to look out for in 2018 for Toronto's Real Estate Market:

  1. Rising cost of borrowing (mortgage rates)

  2. Balanced market: buyers can negotiate & sellers expectations are realistic

  3. Strong Condo market due to affordability

  4. Regulators are done introducing new rules.....for now!

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