The Optimist Club Will Do Well This Year!
Happy New Year!
The Toronto real estate market had, in my opinion, quite surprising results in2023.
We entered the year with threats of a recession, increasing borrowing rates,predictions of a huge number of homes going under power of sale. That just did not happen. Yes, the constant borrowing rates increased and the naysayers did have an impact on the market, but certainly to a minor extent. The GTA market ended the year with almost 70,000 sales and while there was an impact on home prices the average price dropped 5.4% from the previous year. The largest impact the negativity had was to keep buyers on the sidelines, waiting to see what would happen before they bought a home. Well, now we know the impact, negligible!
Interest rates have already started dropping, which will do two things. One, is that more people can now qualify to buy and two, this will instill confidence in the market. Unfortunately, this is not a good thing for buyers. More buyers create more competition which results in higher prices. When you add into the mix that Canada will accept another 400,000+ new immigrants this year, the lack of housing that the GTA is experiencing will grow exponentially. I think that those people who bought in 2023, despite the higher-than-normal borrowing rates, will be celebrating their foresight!
The good news is that it’s not too late to get into the market. People are slow to adjust, to get into a frenzy of buying. Opportunities exist in the market today. Rental rates have increased tremendously in the last two years. In central Toronto, 1-bedroom units that were renting for $2,200 a month and now renting for $2,900 a month. With record immigration levels, the cost of rent will continue to rise. Of course, there is always the question, “how will people be able to afford that?” The fact is that those who can afford it will live in Toronto, those who can’t will have to share or move further away to smaller communities. New York, London, Tokyo, all world class cities years ago had rates similar to ours, and the prices now are exorbitant. That’s where we’re heading!
I believe now is a great time to purchase an investment property and/or to upgrade your home. If you’re thinking of buying or selling, give me a call,let’s chat. Let me give you the benefit of my experience as well as the experience of RE/MAX, the number one company in the world to help you make the best decisions for you and your family.
Give me a call, it doesn’t hurt.
Have a great 2024!
Your Friend in Real Estate,