2019 Spring Market Forecast - The Storey Team : Toronto Real Estate

The Storey Team : Toronto Real Estate

2019 Spring Market Forecast

05 April 2019
Tom Storey

Today I want to give you an idea of what I thinks going to happen in the next three months of the year. Let's call it a Spring forecast video, not predictions, but forecasts of what we're seeing so far for the Toronto real estate market. First, I think something that needs to be addressed is that the federal budget came out last week. A lot of people seemed excited about it. I don't think much is going to change, especially for this market and a lot of the condos that sell in downtown Toronto. 

The two main changes were,

1) You can now take $35,000 out of your RRSP as a first time home buyer, tax free, whereas it used to be $25,000.

2) CMHC is calling their down payment booster program.So, we don't have all the information yet, and it's not actually going to come out with everything until about September of 2019, but essentially, if your household income is under $120,000, you're a first time home buyer, and the maximum that you're going to spend is $480,000 CMHC for resale properties will give you a five percent boost to your down payment, and for new construction will give you up to a 10% boost.

This sounds great on paper and it's a great talking point going into the election for the liberals, but something to keep in mind is that, now CMHC owns equity in your property, and again, they haven't release all the details yet, but I have a feeling they're also going to want a piece of the appreciation when you end up selling that property down the line. So, for anyone that qualifies for this program, just keep in mind that the government will own equity in your house into the future, and you have to decide if you're okay with that, or not.

Neither of these changes will have any effect on the Toronto or Vancouver market, but it will, maybe have an effect on other areas of Canada where housing is more affordable.

So, over Q2 in the next three months, even though it's only 25% of the entire year, almost 35% to 40% of all the transactions in Toronto are going to happen.

In the 416 area code, so Toronto proper, 72% of all the sales that have happened have been condominiums, and I have a feeling that I know why. The first is that there's three segments that comes into the condominium markets: You have your first time home buyers, you have your typical downsizer, moving into a larger, older unit, and then you have your luxury purchaser, and the condo segment of the market gives you all the options. Where, if you want to buy a freehold property, at least in Toronto you need almost $1 million.

For the overall market, including freehold properties, what I've seen so far is because less people are getting approved for the mortgages they want, because of the stress test, and because the mortgage rates are slightly higher, people aren't moving as much as they used to, and what that means is less new inventory to the market, which spikes the demand.

So far this year, and into the future of the Spring, what I'm seeing is that the good properties that are priced correctly are selling, and they're selling fairly quickly, and sometimes for record prices, but not everything's selling. It's healthier now. A property can actually sit on the market for a few days before it sells, but overall the good pockets, especially located close to the core of the city are moving very quickly.

I think sometimes we even take for granted the quality of life that we have in the city, and that's why real estate is so attractive, and it always comes down to three core fundamentals: One is immigration, the other is interest rates, and the third is unemployment.

Our immigration in downtown Toronto is growing four times faster than the average city right now. Interest rates, although they've gone up a little bit, it's looking like the Bank of Canada's taken their foot off of the gas and they're going to remain basically where they are, or they could even go down in 2019, and unemployment is at a 40 year low in the city of Toronto. A lot of corporate offices are moving from the outskirts back into the core of the city, because this is where people want to live, this is where they're buying the properties.

I hope that was a bit of insight for you, and you can use this information when making decisions in buying or selling in the Toronto real estate market. If you have any questions, you can always reach us online at Storeyteam.ca, or follow us on our Instagram. We are extremely active on that platform @thestoreyteam