Buying a home in Toronto has been nothing but challenging these past years, but as the housing market begins to cool down, there is more hope that buyers may have chance of purchasing their dream homes soon.
Turning of the Tides?
The TREB shared that some home owners have cashed out their equity after hearing about the provincial housing policy in April and the increase in supply of resale homes in May due to the first quarter’s strong prices.
Sellers that listed their homes in spring are seeing lower and fewer offers from would-be-buyers. In fact, home prices in Toronto dipped 7% in May compared to April although it is still 15% higher than May of last year’s average home price.
Toronto Real Estate Board director of market analysis Jason Mercer shared that a month-to-month decline did happen although the market soared. The details were released in the end of May statistics by TREB.
The May cool down occurred with a 43% hike in active listings but Mercer was quoted that this is not an indication that the housing bubble will burst. He added that for that to happen, a dramatic economic change has to take place. Examples of such would be a real increase in lending rates or a significant change in regional employment.
Toronto Housing Competition Still Fierce?
Mercer further shared that there is still enough buyer competition to keep pushing home prices up – if the average price growth of about 15% and less than 2 months of housing inventory is to be looked upon. He also said that buyers are simply taking a step back this month to see how the new government policies and foreign buyers’ tax will affect the market,
A housing commentary from RBC Economics Research stated that buyers and sellers are locking horns because we’ve entered a period of price expectations adjustment. This will predict whether a buyer’s market will be coming in the months ahead.
One realtor said that buyers should not expect to chance upon a steal in the near future but that they can expect to have more choices and more negotiating power.
Owner of Spring Realty Ara Mamourian shared that a lot of buyers are misunderstanding available data and thinking that there is a crash where there is none. There is no huge buying opportunity but rather an increased opportunity to buy with less competition, not an absence of it and certainly no huge discounts coming soon. He added that for safe measure, sellers must make sure that their realtors have sold their old home first before buying their next home, taking a 180 degrees turn from the first quarter’s real estate advice.
Desmond Brown of Royal LePage said that the current market is not a new normal, rather only a return of the old normal. He also shared that he is welcoming this market change because this will allow people to move to a bigger home if they need to without having to jump hoops because they can’t afford to.
Thinking of taking advantage of the changes in the Toronto real estate market to purchase a home soon? Contact us at Mortgage Central Nationwide to find out how we can help.