Things are going a bit crazy in the Toronto real estate market lately.
Douglas Porter, chief economist at BMO Capital Markets said earlier this month that “The Toronto market—and the many cities around it—are in a bubble,” However, the Fitch Ratings 2017 Global Housing and Mortgage Outlook has a Stable or Stable/Positive outlook for most the housing and mortgage markets in the report but feel that price rises in some countries such as New Zealand, Norway and Canada are expected to moderate in 2017. They say “there is a heightened risk of a price correction in over-valued markets.” A correction can be good news, it can be simply a slow down or leveling off, which would be great!
A normal market is around a 3% increase. Royal LePage is still predicting a double digit increase, but perhaps dropping from 20% increase annually to 10%. “In 2017, we anticipate a movement away from the regional extremes of real estate feast and famine – and that is a very good thing.” said Phil Soper, President and CEO, Royal LePage. Things are starting to show signs of cooling. However, according to the Toronto Real Estate Board, the GTA is still in a a seller’s market with only 36 days of inventory at the end of 2016. It is a seller’s market if there are 120 days of inventory or less, (how long it would take to sell all the current homes for sale at the current sales activity). This lack of inventory is keeping prices high.
It’s true, the spring market is getting into full swing with crazy bidding wars and multiple offers but don’t despair. There are still opportunities for people with the vision to see it. It may take a little longer to find or a little more elbow grease to make it happen but the good side is that Toronto remains an excellent world class city that has had positive growth over time, despite it’s blips. And if you are buying a house for the long haul because you love it, then you will weather any ups and downs the market will throw at you. If you want to chat, give me a call!