Things are looking up! According to the October issue of the Toronto Real Estate Board Market Watch, it appears the market is balancing out and buyer confidence is on the rise in the GTA.
After the dip we saw this past summer, a lot of buyers took a step back to see how things would pan out. This left a lot more housing inventory on the market, and with more supply to choose from buyers were more picky. As Sohail mentioned in last month’s post, there was much less urgency – and the crazy bidding wars we’d gotten used to seeing pretty much disappeared. But in October, we saw house prices start to pick back up. And not only are they higher than they were this summer, they’re well above prices last year at this time – the average house price is up 2.3% from October 2016. It’s a great sign!
On the other hand, the actual number of sales is still down. October 2016 saw 9,715 homes sold – this year that number is a much lower at 7,118. While that’s a big decline, things are changing fast: the increase in sales from September to October (6,379 to 7,118) of this year is the biggest jump we’ve seen in 10 years! So, momentum is definitely picking up.
We’re starting to see confidence coming back, especially in traditionally hot 416 neighbourhoods like High Park, the Annex, and Riverdale – in fact, a house in the Junction recently got 19 offers and sold for well over asking. But growth is steady in other neighbourhoods as well.
People will always want to buy in Toronto
Despite the recent dip, the Toronto market is strong – although things balanced out recently, there was no real bubble to burst because the fundamentals of our city and our economy haven’t changed. People want to live in the city, and here’s why:
- We’ve got a good economy – our GDP growth in the last quarter was 4.5%, and the unemployment rate in the city has fallen to only 6.1%.
- Immigration is up, and the government just announced they’ll be admitting close to a million immigrants over the next three years. A lot of those new Canadians are likely to end up in Toronto – this is where the jobs are, and where many of their communities reside.
- Rental prices have gotten so high, and supply so low, that for many, it just makes more sense to buy than rent.
- Condo sales have grown exponentially – people are buying entry-level homes, building equity that will allow them to purchase houses down the road.
- While interest rates have risen slightly, they are still historically low. Buyers can lock into those rates for five-year terms and still have most of their monthly payment going to principal rather than interest.
It’s a great time to buy in Toronto
Prices won’t get any lower – as confidence returns to the market, growth has been strengthening and steadying out since the government introduced their new housing rules in April.
However, a lot of buyers are still in a “wait and see mode,” which actually makes it a great time to get into the market – so take advantage while others are holding back. This is especially true in neighbourhoods that don’t fall into the “hot demand” category, like the ones noted in Toronto Life’s list of The Next Hot Neighbourhoods. There are lots of great opportunities out there for buyers. It’s still possible to get a house in Toronto for under $1 million! Especially in neighbourhoods like Mimico and West Rouge that are only 15 minutes from Union Station on the GO Train.
Want to know more about the market, specific neighbourhoods or buying and selling in TO? We’re all here to provide you with answers.
