Inside the Toronto Real Estate Market – February 2017 Edition
This market might even be more dramatic than the Real Housewives of Toronto.
Even we are blown away by what is happening. An ongoing lack of inventory (down 50.5% compared to February 2016) is continuing to drive prices upwards. The year over year average price of a Toronto home is up a whopping 27.7%!
Of course the big question is…is this a bubble that is going to burst? While we don’t believe we’ll be seeing the same gains this time next year, we also don’t see any major drops in the 20-30% range for the foreseeable future barring any major events such as a dramatic raise in interest rates or a major impact from a global economic crisis. Again, the only thing that will begin to steady out the market is an increase in inventory.
And what about foreign investment? Anecdotally we are hearing from our colleagues in north and central markets that they are seeing an increase, likely from the tax imposed in Vancouver, from foreign buyers, we have not found that to be the case in the Toronto East market. An Ipsos Reid survey estimates that foreign investment only represented 5% of buyers in our market.
The challenge is that any new developments are not going to magically be completed ahead of schedule. As they say, they aren’t building any more land so unless there is a major move towards increased density the future of our market is not going to change dramatically.
To further propagate the problem, the option of renting vs. owning is a growing issue as available rentals are in short supply as well. There are stories of line ups around the corner of condo buildings to view rentals and even bidding situations as well.
So what future does this paint for Toronto’s real estate market?
Are we going to see a higher rate of generations of families living together? Two families co-owning as we’ve seen profiled in Toronto Life? Parents investing with their children to buy a home? Should Toronto be fast tracking any applications for higher density development than is currently existing on a site? Will there be a growing trend to higher density and minimalist living?
Just remember, if you currently own a home, you are going to be selling and buying in the same market so all changes in the market are relative. Take your time to find the next home and don’t get too caught up in the frenzy.