Better late than never! HOT June market.
Working through June, one could feel that the market was extremely active with multiple offers and increased activity. But we were all quite surprised when the final numbers came in from the Toronto Real Estate Board showing that June’s sales (8,701) were only down 1.4% from June of 2019 (8,826). We knew that there had been a huge pent-up demand for homes and that demand exploded in June! I believe that this will continue in July and August.
Prices were up 11.9 % on average over June 2019, with the year to date average price rising to $891,167, up 8.7% over 2019 year end average price $819,286. All segments of the market were very active with multi-million dollar homes starting to move again with 365 homes selling over $2,000,000, including 323 detached homes as well as 16 condos!!
The big news is really twofold. One is that there is a small inventory of homes for sale (29% less than a year ago). The second factor is that interest rates have dropped to 2% for a five year term. This has brought new buyers into the market place because they can now qualify for mortgages and it really brings down the cost of borrowing for those investing in rental properties. For example at 2% interest rate on a $700,000 mortgage ,this represents roughly $1,166 per month. At 3% interest it represents $1,750 of Interest monthly, ($584 per month more). Investors have realised that that $584 per month would go a long way to turning a break-even rental property to a profit-making rental property!
If you have questions on the above, give me a call. I’ll be happy to help show you why the mortgage interest rate is just as important as price.
While Covid cases are on the decline, let’s not lower our guard! I am still selling homes in a secure and safe manner protecting myself and my customers. If you have any questions or have a friend who is thinking of buying or selling please remember me I’ll be happy to be of service!
Have a great July and stay safe and if you can please support my ride to help kids.
Stay cool,calm and carry on!