In a cyclical real estate market patience is everything; however, many buyers and sellers are uncertain if they can wait for the Canadian housing market – particular Toronto’s – to recover.
If we’ve learned anything from history, it is that the Canadian real estate market tends to bounce back over time and become even stronger. The latest housing data that was released in June 2018 by the Canadian Real Estate Association (CREA) showed that sales were up from May in Canada’s housing market news.
What You Need To Know About The Housing Market News
According to the latest housing news, existing Canadian property sales rose by 4.1% during the period from May to June. This was Canada’s most significant month over month gain in 2018. Prices in the country’s real estate market fell o.1 percent during this period, while there was a 0.9% increase from the previous years.
Real estate news Toronto reported over 60% of sales in the local market for June in comparison to May. The increase was led by the Alberta housing market, Toronto, and the rest of the Greater Toronto Area (GTA). Contrary to this, sales in British Columbia continued at a moderate pace.
Sales unaffected by Canadian housing seasonal adjustments dropped almost 11% compared to the previous year. The country’s real estate market news reported on this being the lowest number recorded in five years. Activity across Canada (mostly Toronto) dropped about two-thirds in comparison to the previous year, especially in areas of the Lower Mainland of British Columbia.
According to the latest Toronto real estate news and updates, the new government of Canada rules and stress-test for individuals applying for a mortgage have been burdening sales in the market; however, CREA believes that the month-over-month increase in sales is a good sign that the impact of the more stringent Canadian housing mortgage qualifications that were introduced in January is starting to lift.
The extent to which the imposed Canadian government rules affect sales varies with each housing market across the country. The rule requires that prospective buyers – even those making more substantial down payments – prequalify for a mortgage at the highest rate. They are expected to have at least two points above the rate being negotiated or meet the five-year benchmark rate by Bank of Canada in Toronto.
According to the housing news, Gregory Klump, chief economist of the CREA, stated that “Canada’s national increase in June’s home sales suggests activity may indeed be starting to turn the corner.” He urges Canadians to look ahead, since “home sales activity and price gains will likely be held in check by higher interest rates.”
Moreover, the number of new house properties entering the market in Canada, specifically Toronto, was down 1.8% in June. Lower than the previous year’s recordings. Listings decreased drastically, especially in a large area such as Toronto and other urban real estate markets, including regions of British Columbia Lower Mainland, Calgary, Ottawa, Edmonton, Toronto and Montreal, Canada.
So with the increase in month-over-month sales and the retreat of new Canadian listings, there was a 54.3% national sales-to-new listing ratio in June in comparison to the 51.2 percent recorded in the previous month’s real estate news.
Consolation about the Real Estate Market News in Canada
Overall, there are indicators that Canadian buyers and sellers from Toronto should sit tight during this real estate market Toronto crash and wait for the payoff – assuming you have time on your hands to spare. If the patterns we’ve seen in recent real estate news Toronto by the CREA continues, there is a small consolation to anxious buyers and sellers that the market will be rebound soon enough.
Whether you’re planning to stay in a new or existing property for the medium or long term in Canada, there isn’t much to worry about the real estate news. Of course the loss of your job or unexpected pregnancy, despite how exciting, can change all of this. It varies with each Canadian.
So Is Canada’s Housing Market Out Of The Woods?
For Canadians who are anxious about jumping in or out of the market, learning what prices will look like in the medium term – that is how low they will drop or how high they will rise – can be important in the decision making process. The sad reality is that no one can predict the future of Toronto and based on various factors all of those housing news and events are uncertain.
CREA numbers are indeed showing good sings and TD Bank has also suggested that the Canadian housing market will improve significantly towards the end of the year and strengthen in the coming years due to the prospect of increased employment and population growth in Toronto. Of course, there are a few gloomy economists; such as IMF which, postulates that the market prices will fall drastically from 30 to 60 percent due to recent news and events in Canada.
If this happened, it would be catastrophic to the housing property market (especially the Toronto condo market), affecting much more than real estate prices, news, and marketing. Canada real estate prices always bounce back from the news, so the main question is how long Canadians will have to wait before they’re able to purchase a home (see here for all the new and upcoming condos in Canada).
So What We Have Learned?
Overall, the Toronto market is expected to benefit from the previous baby boom. Over 1.4 million people in Canada ages 54 to 72 are expected to purchase a house in the next five years, based on a survey conducted by the real estate marketing powerhouse Royal LePage in Toronto. Buyers will either be looking for cheaper or green living options away from major cities or downsizing. Regardless, this is expected to affect the Canadian housing market positively according to housing market Canada news.
As it relates to real estate prices, many in Canada believe that there will be some relief for individuals, especially those leaving family-sized properties. First-time buyers are expected to benefit the most from these events, primarily the generation Z and the millennials. Canadians in Toronto who opt to downsize will also open up more space for older millennials who are already a part of the real estate market Toronto but looking to upgrade their living space in size.
It all sounds good; however, the problem is this will technically lead to an increase in the demand for housing which will lower the affordability of properties to many people hoping to enter the market in Canada, mostly in Toronto. Stay tuned for more about housing market Canada news.