<img height="1" width="1" src="https://www.facebook.com/tr?id=390674378043480&amp;ev=PageView &amp;noscript=1"/> 2019 Toronto Real Estate Market Predictions - The Storey Team : Toronto Real Estate

The Storey Team : Toronto Real Estate

2019 Toronto Real Estate Market Predictions

09 March 2019
Tom Storey


Welcome to what is probably my favourite video to film all year long. My name is Tom Storey, I'm the team leader and the sales representative with the Storey Team with Royal LePage in Toronto. If you haven't seen our videos before, we're frequent contributors to the Toronto media, CBC, CP24, CTV, Bloomberg, Toronto Star. Pretty much if you've heard of it, we've probably given them a quote on what's happening in the Toronto real estate market.

This video is looking a bit back at what happened in 2018 and predictions for the future of 2019. Now, we can give our recommendations based on the stats that come out and everyone can tell a different story when you're looking at the numbers, but we do this on a day to day, we're on the ground level, we're seeing why people are wanting to enter the market and why people are selling, so hopefully you can keep that in mind as you watch this video and if you have any questions at the end, just let us know.

Okay, so let's quickly look back at what happened in 2018. It was almost like 2017 where it's basically the year of the condo again, affordability, the peak millennials trying to get into the market. There was a huge amount of demand on condos, specifically in the core of the city and we saw double digit price growth in appreciation yet again.

A big reason why this was happening is because of the stress test that came into place on January 1st, 2018 for conventional mortgages, meaning if you put 20% down or more on a property, even if you were getting a mortgage at, let's say 3.5%, you were being stressed two basis points higher at 5.5%, so you were going to get approved for less money and then also in 2018, we had three rate hikes from the Bank of Canada, so the overnight rate went up three times. It started the year at 1%, now it's at 1.75%. So money, you're getting approved for less of it and it costs more to borrow. So with those two factors coming in, it should have meant that we have more downward pressure on the market, however the population in Toronto really kept price growth up.

Overall, it was a fairly good year, detached homes kind of remained stable, semis had a really good year because of those affordable freehold option. If you look at ... let's call it downtown Toronto, Yonge and Bloor, the nucleus of the city, and you have rings going out around it, as we move out in to the suburbs, it was a year of real correction because their prices really shot up in 2017 and they kind of came back to real life in 2018.

Now let's get to the point of why you're actually watching this video and I'll give you my predictions for 2019. I think overall the markets are going to have moderate growth. The stress test is no joke, it really knocks people down an asset class, so if you're looking to buy a detached home, it's likely that you're only going to be able to afford a semi-detached now. I'm looking at 3% to 5% growth across the entire GTA market. You're looking at 5% to 7% growth in the core of the city, let's call it the 416 area code. I do expect condos to have another good year, but I don't expect double digit price growth. The reason being is the price gap.

So the average condo compared to the average freehold property, it was a big amount of money in that gap but in the last two years, it's really gotten closer and there will become a time when the average buyer is saying, "Why am I spending this much on a condo when I could just buy an entry level freehold property?" So keep a close eye on that, it's closer than it's ever been in the last two years and that's why I think freehold, specifically detached properties, are going to have a resurgence in 2019.

Now it's fair to say that the Toronto rental market is absolutely insane. When Kathleen Wynne's rent control was put in in April 2017, since then, rental prices have skyrocketed because there's no new inventory, less people are moving, of course because they're in rent control, why would you make that lateral move? So anything that's already built or lived in is still in rent control, it's basically anything that comes new to the market, meaning new from the builder or recently converted, that no longer has rent control after that one year time period. This should hopefully bring more inventory to the market, as the average one bedroom condo in Toronto has reached over $2,200 a month.

Thank you so much for watching this video, please keep in mind no one can predict the future and if they say they know exactly what's going to happen, they're probably lying, but what we can do is we can take a look at the numbers of the past and have a pretty good indication of what we think's going to happen. If you have any questions, concerns, or comments about this video, please post them below, I'm always open to feedback. If you'd like to follow us along online, we're extremely active on Instagram at thestoreyteam and I'll put that link below as well. Happy holidays, happy New Year, if you have any questions about the market just let us know and we'll talk to you in 2019.