Three words – CRAZY HOT MARKET! That’s right, the demand for housing is stronger now than it’s ever been. In Toronto sales have soared for all housing segments as have prices with the exception of condos for which prices have decreased. Fear not condo owners, the investors are back and we’re most definitely going to see prices rise again and the rental market pick up.
The hunger for real estate is unprecedented. Inventory levels are at rock bottom lows and buyers are chomping at the bit. The entire country has experienced this phenomenon and the average price for a home in Canada is now $600k.
Are you scratching your head in wonder? Many people are. What I can tell you is that this isn’t by accident. Think about it. Covid hits, the world shuts down, most people are working as usual albeit in a virtual manner, most have not lost their jobs, people can’t travel or entertain, people can’t dine out and people aren’t really spending. Some are boosting their incomes with government assistance and many are able to boost their savings. For the first time ever non mortgage type debt has fallen. So less debt means easier borrowing. Cheap money really is the rocket fuel propelling the surge in mobility as is the desire to upscale to roomier digs within the city, suburbs, country or cottage.
Here are some key trends we can expect to see this year.
1) Interest rates will remain low for at least 18-24 months as we return to a new and improved post Covid world. Our financial system is predicated on rising home prices as the mortgage business is a huge industry not to mention the tax revenues from home ownership. In essence the government is incentivized to support the housing market.
2) Condo prices will start to increase and are expected to normalize to pre covid levels again towards the end of the year and into 2022. Smart buyers and investors are taking advantage of the low prices now while they last.
3) Rents will also begin to increase as immigration opens back up and students return. Did you know that Canada has a plan to boost immigration levels over the next 3 years in order to compensate for the shortfall of 2020?
4) The severe lack of supply of housing offered for sale will continue to foster frenzied competition amidst buyers.
5) While we don’t expect government intervention remember that the housing market is being watched and in particular as it effects household debt ratios.
NOTE TO BUYERS If your circumstances are such that you can get into the market, then do it. The best time to buy is when you want to buy and can afford to buy.
Evaluate the length of time you plan on staying in the property and whether what you’re paying represents good value if you sell after a number of years. Look at the big picture. Real estate has always been a sound, stable investment and has increased over time regardless of outside factors. If the economic fallout of 2008 didn’t confirm this, then Covid certainly has.
NOTE TO SELLERS If the timing and circumstances work for you to sell your home, then great – you couldn’t find a better time than right now in 2021 especially during the first half of the year.
Some sellers prefer to sell quickly without putting their homes on MLS. We call these “exclusive listings” and we do a lot of business agent to agent and with our own buyers through a large off market network. If you aren’t keen on people traipsing though your home or going through the process of decluttering, painting, staging etc. then I can still get you top dollar.
However, if I feel that listing on the Multiple Listing Service would put more money in your pocket I won’t hesitate to tell you and my team and I will work to get your home camera ready in no time.