The real estate industry in Toronto is currently at an all-time high. We are only into the third month of the year and sales are already sky rocketing. This is fantastic news, especially considering the fact that the weather hasn’t been that great.
The month of January had 4,0009 sales, and 9,456 homes were listed on TREB’s MLS. Although selling prices were slightly lower in comparison to December, the number of sales had increased.
The new year has kicked off with several new trends, and one trend to pay attention to is higher prices for duplexes, condominium apartment homes and condo townhomes.
It appears that there is continued pressure within the market about the buyer’s ability to afford current prices coupled with interest rates. There is a high chance that the majority of people wanting to buy a home are looking for the cheaper option. It is clear that this issue of affordability has been brought on by OSFI who have introduced the stress test on mortgages. TERB are not at all happy with this and they have approached the government and asked them to review it in the hopes of making it more flexible.
TREB released their report on what is taking place in the real estate industry on February 6th. The report contained several interesting highlights and examined what took place in the industry in 2018 and predicting what the industry will be like in 2019.
According to the report, the fourth quarter of 2018 marked housing as the third most important issue throughout Canada, and the second in Ontario. In general, Canadian residents believe that investing in property is a viable long-term investment. Here are some of the main highlights from the report:
• Approximately two-thirds of investors are planning on selling some properties in 2019. There are several motives to sell and one of them is that there is a tightrope on the amount of rent they can charge, and houses and apartments are not filling up as quickly as investors would like. Despite the fact that there are going to be several new units listed, 2019 is expecting to see a limited supply of rental units.
• Price growth will continue, and the condominium market will be the driving force behind this. The average price of a detached home will be less than the real estates average growth rate as a whole. This increase is still quite low, but it will continue to remain low because of population increase, a reduced fixed rate average for borrowing costs and low unemployment rates.
Recently, the conversation regarding key housing plans and positive action has opened up. There is a high possibility that the mortgage stress test implemented by OSFI will be investigated. In 2018, the average household income for homeowners was approximately $102,000 per year. Based on these figures, most buyers were unable to afford homes in the locations they really wanted to live. This meant that they were forced to wait until they had either saved enough money or found a higher paying job. If the mortgage stress test is made more flexible, it will mean that home buyers will have better options when it comes to making their ideal purchase.
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