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Market Watch 2017 Predictions

We are one month in and the 2017 real estate market is blazing hot. TREB just released market stats for January and reported a 22% price increase over the previous year. Obviously, housing prices will continue to climb at record breaking proportions.

Some of the changes implemented by the Government of Canada in the last quarter of 2016 will surface and particularly will impact mortgage rates.Interest rates will begin to rise. Lenders are operating under new mortgage guidelines. Interest rates are increasing as portfolio insurance is not longer available for most qualifications. Lenders are now passing the higher cost of funds onto consumers in the form of higher mortgage rates. Under this scenario, mortgage interest rates could rise up to the full amount of 30 to 40 basis points

The condo market will continue to trend upward as freehold ownership in Toronto slips further away from first time buyers.The condo market. Offer dates, multiple offers, bully offers will become standard practise for condos this year.  Good, well priced inventory is already selling within 2 days on the market. Advertising a presentation date will bring in the buyers and will without a doubt increase prices.
Not willing to buy a condo and pay monthly maintenance fees? There will increasing demand in once fringe neighbourhoods. Think well beyond The Junction and East York’s Lumsden neighbourhood.New hot neighbourhoods. Areas outside of central Toronto will spike in demand. To the west, I see Mimico and Lakeshore West skyrocketing and to the east, Wexford and Dorset Park becoming affordable family options.
For those who want to live in Toronto, but can’t afford to purchase. Be prepared for an insane ride in the rental market.Multiple offers on rentals. For sure this will happen. Competition will be fierce. Good news here is that rental prices don’t go too crazy over list price. Landlord’s usually decide to go with the best candidate on paper, not the one willing to offer more money.
In the fall we saw a huge lift in prices and foreign buyers scared away from Vancouver after the implementation of a foreign Buyer’s tax.  Foreign buyers will continue to dominate the market. Unless Ontario follows up with a similar tax, which I don’t predict will happen in 2017, foreign buying power will remain strong in 2017. Preferred properties are detached homes throughout the central core, turn key resale condos, as well as, new construction.

Finally, we need to look beyond Toronto, particularly to our friends to the south. The election of President Trump and the change in the political administration of the United States could impact the Canadian economy.

The Trump factor.  I am not concerned with a mass exodus from the US buying into the Toronto market. Any lift from a US buyer will be masked by the speedy flow of foreign buyers from China. The Trump factor is more economic. Trump won the Presidency based on a platform that promised significant change from the status quo. Promising infrastructure based jobs and the return of industry to American. Trump would like to do all this without raising taxes. How do you raise money without raising taxes? You sell government bonds to raise the cash, which will flood the bond market.  Real estate is tied to the bond market through interest rates.  If bond yields go down interest rates go up. The Canadian economy is very much interdependent and interconnected with the economy of the United States.  Circle back up to my first point, interest rates are going to rise.
With patience, perseverance and a little thinking beyond the box, I have your back and best interests at hand.

If you are thinking about entering the market or making a change more than ever this market requires solid guidance, honesty and trust.  I look forward to hearing from many of you over the next few months.