Interest Rates
The inching up of interest rates and most stringent mortgage rules are among the factors that could play a role in tempering sales in the red-hot Toronto region market, mentions Jason Mercer, Manager of Market Analysis for Toronto Real Estate Board (TREB).
Those results could be enough for some households to put a home buy on hold. But Mercer mentions that most consumers will look for other selections in order to pursue their home ownership dreams.
“If you were thinking of to purchase a single detached home in Toronto, may be now you are looking at buying in one of the surrounding fields or you are going to change both your home type and the geography you are looking for,” he said.
Supply and demand
Industry experts agree that the lack of available properties — resale and brand-new houses — is still being the real estate reality in 2017.
Mercer has predicted that re-sale listings will continue to materialize at very low levels, driving up prices.
Ms. Williams, real estate agent, expects listings are likely to be scarcer in 2017 than they were in 2016.
“I don’t see a lot of people initiating lateral moves. With the closing costs and the higher cost of houses it doesn’t make sense,” replied Williams. “I think we’re going to see much more people that are either up-sizing or down-sizing, which is going to keep the amount of listings low in 2017 — which could create higher costs and more bidding wars .”
The supply of brand-new houses will likewise continue to go down, mentions Bryan Tuckey of the Building Industry and Land Development Association( BILD ). There were 2,300 low-rise dwellings on the market in October compared to 4,000 in January, 2016, he said.
A lack of serviced designated lands demonstrates “our members are still in difficulty to get homes on the market,” he said.
Condos
High housing prices are bringing condo lifestyles into the mainstream for more young households, mentions Mr. Slutsky of BuzzBuzzHome.
Wise investors are also looking at older condos because they frequently offer more space.
New condos are also getting larger, mentions Tuckey. But that they are able to likewise affect price.
Condo prices have gone up 10 per cent time over year.
“Over the years, some of the increased cost of land, building and labor were disguised a little bit because sizes were getting smaller,” he said.
Williams, who works out of Liberty Village, says she’s already seeing a demand for those larger units.
As well, she replied, more buyers are looking for outdoor space and a view.
Proximity to the subway is also increasingly important as parking and congestion become more expensive and time-consuming, she said.
Two or three years ago the record number of condos under construction and they are coming down the pipe and they might have raised concerns about larger inventory, replied Mercer.
But “if there’s” fewer units on the market, the Toronto region might push the high-rise segment to be as tight as the markets for detached, semis and townhomes, he said.
Price growth in the condo marketplace likewise “speaks to the strong first-time buyer activity we continue to see in the City of Toronto and its surroundings,” he said.
Competition for houses
New mortgage rules in autumn of 2016 have slackened things down, replied Mr. Brown, real estate agent, but rivalry is still alive and well among purchasers vying for the same property.
The difference, he replied, is that instead of 10 offers, the sellers may to be looking at six or eight.
But as 2016 is coming to an end, Brown said he’s seen more conditional offers being accepted and some properties are sitting on the market a little bit longer.
“In the million-dollar cost range and under it’s still pretty busy,” he said.
But he added, “We’re not really sure what’s going to happen in January and February, 2017, which has been really busy over the last five years. People simply is likely to be tired.”
First-time buyers
With the new mortgage stress requirements introduced by Ottawa in October, 2016, Brown says he’s already seen fewer of the first-time buyers that are coming to the market.
“We’ve had a couple of bargains fall apart because the buyers thought they were qualified for some particular amount of money and then the brand-new mortgage rules came in and we were in the middle and they found out they didn’t qualify for as much as they thought they had,” he said.
If somebody qualified for $650,000 they’re only qualifying for $500,000 under the new rules, replied Brown.
But among first-time buyers, Brown says there’s a developing recognizing that they have to be realistic. Some look back at income properties that help them carry the mortgage.
They’re understanding, he replied, that a starter home isn’t inevitably going to be your dream home.
In some examples they intend to look outside their preferred neighborhoods, replied Williams.
Even with the help of government rebates such as the doubling of the provincial land transfer tax rebate for first-time buyers, it’s a tough for entry-level marketplace, she said.
In brand-new home sales, Tuckey replied ,” Townhomes have become the brand-new single home.
” They’re the living style that people are like to be in when they have households and they want to try to be a little closer to the ground,” he said.
He predicts that builders will continue to innovate with more stacked, back-to-back and smaller townhomes to stimulate their affordability
Policy
Those townhomes will home more people in the region particularly as Queen’s Park moves ahead to update its developing plan to create a denser region.
Home buyers and the construction industry have to start to focus on the house-type supplying that will necessarily be part of that density.
“This is our new normal and I’m not sure people in Toronto understands that,” replied Tuckey.
“The district wants intensification to be part of the future and that does put pressure on existing communities,” he said.
OREA’s Hudak mentions the provincial land policies that are feeding denser developing are for “well-intentioned environmental reasons.” But, he replied, the pendulum has swayed too far.
“You’ve really restricted land use in the GTA until you have more people who are chasing fewer homes and that’s forcing price increases,” he said.
Source: Toronto Star
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