In the Greater Toronto Area, it has been a roller coaster of a year for real estate. At the start of the year the homebuyers faced hearty competition and rising prices. As early as April conditions began pointing to a buyers market.
Both demand and prices have faltered significantly. Home sales were 14% from July according to the data for August from the Toronto regional estate board. On an annual basis the figure was down by 34.2%.
In 4 months it was the mildest disparity. Detached home sales led the pack followed by town homes, condo apartments etc. What we saw last year at this time was home prices were more or less on par, rising just 0.9% from Aug 2021 and 0.4% from July 2022. Experts said this autumn will see more interest.
To reenter the market homebuyers will be eager:
According to Christopher Alexander, activity this fall won’t match that of fall 2021. Which means the market will see healthier buying demand. He also said that it’s been so competitive for so long and you do have a lot of people that put the brakes on their buying decisions. Things have really slowed down since April.
Most people who need to buy are like they can’t have patience, they can’t wait anymore, so they make a buying decision. Most people are interested in buying real estate in canada. In September and October buyers wrapping up their summer travel plans, return to the real estate market with new and fresh expectations.
Bargaining power will shift in buyers favour:
Buyers will have the leeway to be judicious with real estate transactions, with less demand overall and quieter conditions all around. Buyers have the time to make good and better decisions.
They can also negotiate. Most sellers have started lowering their expectations. Proof of buyer- friendly market conditions is already seen by an agent Kseniya Korolova. She had started noticing all the shifts in August. She also notices that a lot of listings are at property value and its lot less listings way below the market value to bring that huge traffic.
Some of the properties may accrue multiple offers. Prices are likely to go up and competition will naturally build depending on the number of buyers that reenter the market. She also said that some buyers will end up holding till next year. She also said that there will be a drop in interest rates.
Much will hinge on the BoC’s next rate decision:
The next rate hike is scheduled for 7 september, following a hike of 50 points on June 1 and a staggering increase of 100 points on 13 July. By 75 points to 3.25% BoC will increase the key overnight rate. It would be interesting to know what tha BoC will do with interest rates.
There are a number of speculations, one of them is that this will be the last rate hike until the end of the year. Following the July 13 hike Bogpmaz shows a shift in the consumer’s behavior.
Continuing Concern of lack of inventory:
According to Alexander inventory levels are low, they went down from 5% in June and July. Because of high immigration the need for more housing is also increasing. Every year new Canadians are coming from different parts of the world.