he Toronto Real Estate market has been pretty rock and roll this year. Prices hit record levels back in April, but have declined for four straight months including another drop in August. The average price for all home types in the Greater Toronto Area in August was $732,292. That was down 1.8% from July and a whopping 20.3% from the record setting levels of April, when the GTA average for all home types was $919,086. It was in April that the Ontario government introduced their 16 point plan to help cool the housing market including a 15% tax on foreign buyers.
When prices drop to that extent, the obvious question is, is this a buying opportunity? We addressed that same issue in our blog post back in June when prices first started to decline. Our view then, as it is now, is that trying to time the market is very difficult to do. That being said, if you have been sitting on the sidelines, the decline in prices is hard to ignore and many experts now believe that the Toronto market may have reached bottom.
RBC economist Robert Hogue said on Wednesday that he expected the Toronto market to follow a similar path to Vancouver. Vancouver’s provincial government was the first to introduce the foreign buyer’s tax in August 2016 and the market dipped significantly on the back of those measures. It has since recovered, however, and sales increased 22.3% in August from the same month last year.
In his note, Robert Hogue stated:
“Our view is that the market has largely adjusted to Ontario’s Fair Housing Plan and should maintain balance between supply and demand. Developments in Vancouver — which went through a similar policy-induced market correction last year — suggest that the bottom for prices may be near in the Toronto area.”
The Toronto Real Estate Board (TREB) has a similar view. Jason Mercer, TREB’s director of market analysis says that the “the relationship between sales and listings in the marketplace today suggests a balanced market”. That represents a shift away from the rampant seller’s market of recent years, but he still expects price growth to outstrip inflation, “If current conditions are sustained over the coming months, we would expect to see year-over-year price growth normalize slightly above the rate of inflation.”
For many people in Toronto, a balanced market is something of a new phenomenon, but if you are looking to buy and sell, it should provide you with a less stressful environment in which to do so. As always, if you need any advice on anything, please reach out to us. Call us at 1-647-490-0500, email us at team@redsquareteam.com or visit the website at www.redsquareteam.com. Our approach is consultative and if now isn’t the best time for you to buy or sell, that’s what we’ll tell you! If it is the right time, we’re ready to get to work!
