2016 was no doubt a record-breaking year for the Toronto real estate market. With the average house prices skyrocketing by a whopping 22% and the average condo prices up by a staggering 15%, it seemed as if nothing could possibly go wrong at all for Toronto. However, much to everyone’s dismay, mid 2017 seems to have slumped a bit and there have been numerous articles talking about the slowdown of the Toronto housing market as well as a number of prognosticators predicting a crash of the housing market in the foreseeable future. And although it’s quite easy to assume that a couple of dawdling weeks are a red flag and an indication of something larger coming into play, a more meticulous analysis reveals that the Toronto market is still very strong despite the temporary pause. Here are a few reasons why the activity and prices in the housing market will soon rebound and continue to climb.
- Tighter mortgage rules
Although there hasn’t been any substantiation of tighter mortgage rules having affected the market, it is possible that they could start in the very near future. In fact, reports signal a healthy market that will not only be good for buyers but also for the sellers as well.
- Supply and demand is still at an all-time high
Population in Toronto has been growing quite significantly over the past few years. And while most of it can be attributed to the fact that there are more and more people moving to Toronto, there is also a steady population growth of the existing population. And seeing as demand is still at an all-time high while supply seems to be currently unable to meet the surging demand, sellers can still increase their prices and sell to the highest bidder.
- The economy is stable
An unstable economy, otherwise known as a recession often has a ripple effect on almost every other sector known to us. And while sometimes it may not be nearly as bad as we envision, its effects can be quite a handful most of the times especially because most companies tend to downsize as a result so as to save costs. When people lose jobs and can’t afford to keep their homes, there a surplus of homes up for grabs and prices consequently go down. Since there is no recession now nor in the foreseeable future of Toronto’s housing market, it’s safe to say that the market is not only going to bounce back but it is also going to continue soaring to much higher heights.
- Mortgage rates are still buyer friendly
Despite the fact that interest rates have been on a upward surge, they are only doing so in manageable increments that can still be met by the income that GTA residents are pulling in. A crash is only likely if the interest rates continue to soar to astronomical figures while we continue to see a spike in unemployment.
