If you’ve considered buying a home in the past few years, you’re likely familiar with Toronto real estate’s hyper-competitive, seller’s market reputation. For most buyers, the record-high prices and fast-moving sales process have been both discouraging and intimidating. Not to mention the thousands of Torontonians that have become priced out of the market outright.
While Toronto’s housing market has been red-hot in recent years, change is on the horizon. If you’re in the market for a new home, here’s what you should know about new trends in the real estate landscape.
Thinking about upsizing to your first home? Some factors of homeownership often go unconsidered by first-time buyers. Read our blog post on the topic here.
The Past 10 Years
Over the past decade, housing in Toronto has become increasingly in high demand. Like in many other world-class cities, the housing demand eventually began to outpace supply. As a result, housing costs in Toronto have climbed steadily each year.
Then, in 2020, the Bank of Canada (BOC) lowered its target interest rate in order to offset the economic challenges brought on by the pandemic. This made mortgages much more affordable for Canadians and led to the already competitive market becoming flooded with buyers.
With more buyers than ever and an already low level of inventory, Ontario’s seller’s market became even more challenging for homebuyers. Record high selling prices, frequent bidding wars and even blind offers became commonplace across the Greater Toronto Area.
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New Sales Trends
Today, as we approach summer 2022 real estate in Toronto is finally beginning to cool off a little. While many sellers are still listing their homes, Toronto is seeing fewer transactions compared to this time last year. As a result, more housing inventory is available for buyers entering the market. That being said, this small boost in supply hasn’t caused pricing to drop just yet.
Interest Rate Increases
In addition to balancing sales trends, there are other factors contributing to the further stabilization of housing in Toronto. Mainly, the Bank of Canada’s (BOC) recent interest rate increases. Back in 2020, the BOC lowered their target rate, leading to an influx of buyers in the market.
Then in early 2022, the BOC began raising their target rate in order to offset inflation. Since March of this year, the policy rate has climbed from 0.25% to 1.5%, making it more difficult for some Canadians to afford a mortgage. As a result of these steep increases, buyers will now be entering the market at a slower rate compared to the early months of the pandemic
Think about buying an investment property in Toronto? Check out these helpful resources.
- Everything You Need to Know About Becoming a Landlord in Ontario
- What Makes a Good Investment Neighbourhood in Toronto
- Everything You Need to Know About Buying an Income Property
What Can Buyers Expect?
While buyers can still expect high prices, the good news is that the process has become less competitive overall. As homes stay on the market for longer, buyers have more inventory to select from. In addition, these new trends will also allow buyers to be less-aggressive and take more time to find a home that suits them.
These balanced conditions will also offer buyers greater leverage during the critical negotiations phase of the buying process. This is where an experienced local real estate agent can help you gain the upper hand. By working with an agent who deeply understands both past and present trends in the market, you can utilize every detail to your advantage when placing an offer.
Regardless of your real estate goals, our experienced team can help you be successful. Contact us.
