Welcome to our Market Update – a recap of stats for the month of June 2018.
A few months ago, newspaper coverage of the real estate market was all doom and gloom. But now we’re seeing that narrative change a bit – a couple of recent headlines (“Real estate experts predict a return to normal” and “Toronto market begins to stabilize after a months-long slump”) are showing a shift towards optimism.
Buyer confidence is on the rise, and the mood around the market is starting to change. We’re seeing that in the numbers as well. June’s average house price was $807K, up slightly from $805K in May. We’ve had six consecutive months of increasing prices – and although we’re still pretty far from last year’s $918K peak, the market is healthy and getting stronger each month.
Is the Condo Market At It’s Peak?
Condos continue to roll along – the number of sales in June was down slightly from May, but prices are holding steady. There is some concern out there that the condo market is at or near its peak – and we share that belief. As the gap between freehold and condo prices shrinks, we suspect buyers will revert to looking at freehold properties again.
If you’re thinking of buying a condo right now, you’re looking at peak prices. But remember, real estate is a long-term investment. If you’re planning to flip it, you may want to exercise caution right now, but if you plan to live there for a number of years, you will be fine.
Looking at the Positives and Negatives
Other positives that are impacting the market include a low unemployment rate (it’s currently at a 40-year low), healthy export and investment markets and increasing wages.
But we’ve also got some uncertainty ahead of us. Inflation is creeping up, and the Bank of Canada is expected to increase the overnight lending rate by 0.25%, which will impact people with variable rate mortgages. Other points of concern include our newly minted Premier, who has eliminated rebate programs for things like energy-efficient windows, impacting the construction and housing development industries. More concerning are rumblings from south of the border with respect to tariffs and potential increases in steel prices – those costs will only be passed on to new home and condo buyers.
What We’re Seeing on The Ground
Home sales continue to move along well, but buyers are a lot more cautious than they once were. However, if a property is priced well, shows well, and is in a desirable location, it will attract a lot of attention, guaranteed. For example, we were recently one of 17 offers on a fixer-upper in Playter Estates, a high-demand neighbourhood close to Danforth and Broadview. It ended up selling for more than $500K over asking. Granted, the original price was artificially low to drive interest, but the demand was still incredibly strong.
A Word of Advice if You’re Looking to Buy
Yes, prices are increasing steadily, but there’s no big panic to buy right away. There are still opportunities out there. Things have stabilized as the impact of the new mortgage rules have been absorbed. People were concerned about what those rules would do in the long-term, but it looks like they didn’t shock the market the way people thought they would.
Want to know more? Let’s talk!
