What to Expect ! Past, Present and Future

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There are a slew of issues affecting the Housing Market right now: NAFTA negotiations/free trade, the inventory problem, government policies/plans and interest rates to name a few.

Depending on the the outcome of the NAFTA talks, interest rates could potentially go up in October or possibly in December and for sure at least once in 2019 at which point they’re supposed to stabilize. Because we’re still in a time of historically low rates, we’re able to manage the increases but rate increases don’t fare well for First Time Buyers who are the most vulnerable.

I’ll try to stay neutral about the new PC Government but will say one thing…. Housing Platform? What Housing Platform? We still don’t really know what the PC’s have up their sleeves.

Last year, the Liberal government introduced the Fair Housing Plan to curb the lofty market. There was a lot of negative media reporting and 5% of the market was lost as a result yet the inventory problem was never addressed. Mortgage guidelines changed earlier this year but still, the inventory problem remained.

A Look Back Over the Past 4 Years

2015 was the 2nd best year in the history of the Toronto Real Estate Board with sales revenues of $86B. In 2016, first time buyers represented 51% of all sales reported and TREB had the best year ever in terms of sales volume. Then the Fair Housing Plan of 2017, rising interest rates and negative media reporting all contributed to a drop in sales. Yet 2017 was still the third best year in sales and second best in terms of dollar volume.  This year we’re expecting to have the third best year in terms of dollar volume. Not bad at all.

One might say that the market has finally entered a balanced state whereby prices increase along with inflation but in the GTA, prices are higher than inflation and the especially in the downtown/central core, it’s still a Seller’s market. 

The good news is that in July and Aug, we saw positive inventory growth. What we need is 12 months of healthy inventory growth. Fingers crossed.

What Exactly Drives Housing? 

  1. Employment
  2. Income Growth
  3. Population Growth

In GTA, the rate of employment is at 6%, growth of about 2.5% – pretty strong numbers.

Income is growing at 1.5% which may not seem like a lot, but it’s actually fairly strong.

The newcomer demographic coming into the city are economic contributors and are boosting population growth which is very strong. 

Looking at the economy, we had 50 million overnight tourists in the GTA in 2017. They spent $9B in our economy. A favorable economy leads to more jobs and the need for more housing. 

Newcomers are the Success Story of the GTA

By the end of 2018 we’ll have likely attracted around 100,000 newcomers this year alone. These newcomers are not the same demographic as even 8 or 9 years ago. In 2011, the profile of immigrants was mainly from the UK, elderly and retired. Now they’re young, educated high earners from China, India, and the Philippines. Further, these newcomers take only 3.5 years to buy homes.

Condo Development Leads the Way 

Condo development continues to boom in the GTA despite rising costs and 78% of new construction is multi unit housing. Outlying areas in the east, north and west serviced by the expanding Go Train system will be particularly favourable as will condo living in the city.

While the affordability of single family detached and semi-detached homes will continue to be an issue particularly in the city,  more affordable alternatives such as condominiums and townhomes will continue to drive prices in those areas as well.

What’s left to be dealt with is the inventory problem which in an optimum  scenario, if given a good 10 years of healthy growth will further the market to bloom at its best. 

One thing we don’t have to worry about is any housing crash!

Source: Terry Bainbridge CIBC Senior Advisor & Market Analyst.
TREB Market Watch.
Kimmé Myles

Matching her knowledge of Toronto’s eclectic mix of central core neighbourhoods and impassioned by her diverse mix of buyers and sellers, Kimmé is naturally motivated to create a positive and professional experience. Kimmé does her homework and knows her inventory. She is genuine, honest and a straight shooter. Nor is she afraid to think “outside the box” as she employs creative strategies to make dreams become reality.

Born and raised in Toronto and coming from a successful fashion background in design and management, Kimmé could not have met a better match for her entrepreneurial skills than by working in Real Estate. Inspired by her father, well known Toronto clothier to the stars, “Lou Myles”, she learned from a very young age to work hard and strive for excellence.

Licensed since 2005 as a full time Sales Representative and a Broker since 2016, she continues to be proud to be affiliated with the Toronto office of Sotheby’s International Realty Canada and to be part of the highly respected world renowned global luxury brokerage, Sotheby’s International Realty.

Kimmé has received numerous sales awards throughout her career including the prestigious Gairdner, Diamond and President’s Awards. She has completed extensive negotiation training and is among a select group of realtors in Canada to hold the Master Certified Negotiation Expert (MCNE) Designation and the Certified Negotiation Expert (CNE) Designation. In addition, she is a member of the prestigious U.S. based Institute of Luxury Home Marketing and also carries the Luxe – Luxury Listing Specialist Designation. She holds the SRS Designation – Seller Representation Specialist and the SRES Designation –Senior Real Estate Specialist – both accredited programs through NAR – The National Association of Realtors, USA.

Entrusted with the life choices of her clients, Kimmé is truly honoured to have the opportunity to serve and assist others and does so with integrity, commitment and enthusiasm.

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