Toronto Real Estate Market Expected To Remain Healthy, Declines Unlikely
The most popular people in Canada are those who are thinking about selling their homes. Across the country, it’s a sellers market as inventory struggles to keep up with demand.
Reports from the country’s two largest real estate companies suggest there is no end in sight for the real estate boom, and that Canadian real estate is now attracting more attention from US buyers.
In the US, the chief economist of the National Association Of Home Builders stated that “In an analysis of house prices nationally and by major regions of the country, it is difficult, if not impossible, to find prices that look out of alignment with underlying fundamentals”.
Low borrowing costs and high consumer confidence is also boosting local interest in the real estate market.
Foreign investment in Vancouver, Victoria and Canmore in B.C., and on Canada’s east coast, continues to have a significant impact. But Canada’s real estate markets have not needed buyers from outside the country to maintain its torrid pace this year.
With historically low mortgage interest rates and rising consumer confidence as the backdrop, demand has been strong all year, with virtually every real estate market reported a lack of quality homes listed for sale.
This has led to multiple offers on homes in major Canadian cities, as well as in some smaller housing markets such as Halifax, Nova Scotia, Regina, Saskatchewan, and Thunder Bay and Sudbury in Ontario.
Though there is talk of a real estate bubble, most in the know consider it groundless, as the current Canadian economy is almost airtight - pumping consumer confidence and driving the sale of significant purchases like homes and luxury cars. A strong finish to the year in the real estate market is definitely anticipated.
In fact the Canada Mortgage and Housing Corp (CMHC) estimates that the average price of resale homes in the Toronto area will rise by 5.5% by the end of 2007. For those folks sitting on the sidelines waiting for a phantom bubble to burst… it’s going to be a long, long wait! Although the prediction is for 2007 to not be as strong as 2006, that’s actually a good thing. It will allow more negotiations to happen instead of having to submit your ‘best offer’ in a multiple-bid situation.
One of the important factors in continued Toronto real estate strength is immigration. Although 75% of new Toronto residents initially rent, within 10 years their rate of ownership approaches the norm for long-term Canadian residents. This ensures a steady stream of buyers for future years!
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