28th November 2016
Inquiring minds want to know if the new mortgage rules & US election are
having an impact on housing activity in Toronto. As it stands, we have
not seen much change. Overall activity in the 416 continues to be strong
as demonstrated by rising prices across every category of shelter. For
the first time, affordability in the rental sector is even raising
concerns as the average price of a one bedroom condo increased by over
7% in the 3rd quarter of 2016. If you are contemplating putting your
buying intentions on hold, you will pay the ultimate price when prices
escalate in the Spring...as they do every year.
The freehold sector did not see much change in the number of new
listings in November's first half, however sales dipped by about 38%
from 173 the previous week to 125. This drop is consistent with declines
in sales over previous years and is more a statement of the approaching
winter market than uneasiness in the US federal election outcome and
continued adapting of the new Canadian mortgage rules which are only
playing a small role. Still, sentiment for home ownership remains strong
as nearly 65% of home transactions in the 416 sold at or above the
The East Core was the hot spot as 84% sold above the list price
62% in the West Core and
58% in the Central Core
If you thought living in a condo was just a passing trend...think again.
The condominium market is having a hard time keeping up with demand.
Compared to this time last year, new condo listings are down 20% while
sales are up 30%. If you think those numbers are exciting, consider that
nearly 45% of transactions are happening at or above the list price
versus a mere 20% last year.
Buyer Tip – Purchase in the Winter
To the surprise of many, there are actually better, more strategic times
of year to purchase a home. From my personal experience trading in RE
combined with TREB’s statistics, the December market has been proven
year after year to slightly cool. A slower than average sales month, due
to many Torontonians either preparing for Christmas or hibernating
results in less competition and lower property prices for you!
Common Buyer Mistake:
I cannot count the number of buyers that say “we’re going to wait a
little longer so we can save up more money” This is a common mistake
made by many.
For example a Toronto home worth $773,500 today was worth approximately
$650,000 this time last year. (19% increase). So unless you can save
more money than most people earn in one year, this is not a wise
approach. While property values may not continue to increase at this
rate, even modest growth of 8% would be difficult to out-earn and
2015 property: $650,000
2016 property: $773,500 (19% increase)
2017 property: $835,380 (8% increase)
Mortgage News – Fixed Rates Have Gone Up:
As many of you may have heard, fixed rates have gone up across the board
with almost all lenders. The reason for this increase is the recent rise
in bond yields (i.e. the cost of funds).
With the unforeseen outcome of the US election, there is speculation
that fixed and variable rates will be on the rise. We did not think we
would see these changes this fast and this could be the start of more
increases to come.
RBC, TD, National Bank etc. have all raised their fixed rates. *** TD
bank’s prime has gone up 0.15% (to 2.85% from 2.70%). The prime rate of
Canada did not go up – this is unprecedented.
*** There are still certain lenders that are offering much lower rates –
ask me for details ***
If you have any friends who may benefit from my Newsletters please feel
free to pass it along.
Have a great day!
Savannah Johnston // Real Estate Sales Representative
T: 416.583.1660 x0101