Happy Spring! Or should I say summer?
Recently several clients have asked me why are there bidding wars? I thought house prices were down?
Yes, the average price is down year over year but Toronto is really a collection of micro markets as an example:
- Condos in the GTA are up 6% year over year and up 42% in two years!
- Semi Detached are down 9% year over year but still up 23% in the last two years.
- Detached homes are down 17% year over year, particularly in the suburbs
- Some houses in the city are sitting on the market for weeks but we just sold one in less than a day!
What’s really driving these changes? We’ve had two major government interventions in the real estate market in the last year. Ontario’s 16-point plan which added a 15% foreign buyers tax has pushed some foreign buyers out of the market and the new OSFI regulations that makes banks qualify homebuyers at the rate plus 2% or the posted rate, whichever is higher. This has affected affordability and has pushed buyers into the condo market, particularly in the smaller units. As an example, condo studios are up 24% year over year.
Despite what you may hear in the news, Toronto is still a resilient real estate market. 135,000 people moved to Toronto Last Year, up from about 100,000/year and 75,000 new jobs were created last year.
While the market has had a correction, it really depends on what and where you are looking to buy. Detached houses in the suburbs are in a buyer’s market and are selling for less than asking while semis in Toronto are down from where the were in April of last year they are still selling over asking. Condos in the GTA are driving the market and can be very competitive as buyers purchasing power has pushed them into this market.
Please let me know if I can help with your search in this changing real estate market. I’m happy to have a quick chat or meet for a coffee.