Finally, a little respite in the frenzy of buying Toronto homes! A frenzy, I believe, created by the media, which were predicting prices would increase by over 30% in March. Really, a self-fulfilling prophesy! By the way, this is the same media that a few months back was speculating that Toronto prices were abnormally high, and the bubble was going to burst and prices would fall. My only comment; the media is primarily concerned about ratings and advertising income, so their news and headlines are biased to achieve their goals!
We started 2017 with extremely low home inventory, and an abundance of buyers. This continued the trend of multiple offers and led to an abnormally strong Toronto market! The media jumped on the band wagon and a difficult situation became even more so. The average price jumped 21% since the end of 2016, and some areas and properties increased by over 30% in the same time period.
Such huge price jumps could not be sustained forever, and as buyers took a pause, more listing started coming on the market, balancing the demand. On April 20, the government added a 15% tax on foreign buyers, (estimated to be 5%-8% of the GTA sales) which also made some buyers adopt a wait and see attitude as to how prices would be affected.
So here are the facts for April.
||YTD April 2016
||YTD April 2017
The basic factors have not changed in the GTA. Low interest rates, great economy, confidence, immigration and continued demand. This will continue to drive the market in 2017. Sellers who priced their homes at prices in excess of the market value will either take their houses off the market, or adjust the price to reflect the current market value. The media will make a fuss of someone reducing their house by $100,000 and still not selling. (Really to be expected if the house is priced at $1,300,000 and is only worth $1,000,000).
What we are experiencing at my company, RE/MAX Realtron, is that the number of messages, sign calls and appointments to view our listings remains strong, and buyers now have more properties to look at before they decide to purchase. (We had 1,113 transactions in April) If you are considering buying, now is a great time, while some are waiting to see what happens. The additional inventory and lighter demand puts you in a better bargaining position than before.
Let’s talk, the situation is complicated. I’ll be happy to explain it all and show you how you could benefit from my experience in the current circumstances!
Have a great May,
Your Friend in Real Estate, Kelvin Wong