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Toronto Property Market
A newsletter from Savannah Johnson

28th November 2016

Good morning,

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 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 asking price.

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 rationalize waiting.

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
M: 416.889.0101
T: 416.583.1660 x0101

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