With the 2016 fall market in full swing, here is what we see for Toronto Real Estate when we gaze into our crystal ball:
Bully Offer Bonanza. If you thought bully offers were rampant in the spring, get ready to be slapped around even more this fall. We’re already seeing more foreign investment in Toronto since Vancouver dropped the 15% foreign investor tax. Buyers waiting until offer night will continue to get burned by bully offers (often more than once). As a result, more buyers will submit bully offers, going all-in for their dream home and paying record breaking prices.
Less Inventory. While the fall months will bring more inventory than we saw this summer, competition and an abundance of buyers will leave you feeling like there are few options. In August there were 9,813 reported sales in Toronto, up 23.5% from the reported 7943 last year. As a result, available inventory of properties for sale has dropped 38% to a mere 9,949 houses and condos (down from 15,997 from last year).
Even More Competition. With less inventory, it’s already going to be hard enough to find your dream home. When you do, get ready for battle. There will be more buyers looking for the same property as you and the price they’re willing to pay will be higher than ever. Foreign investment will move from Vancouver to Toronto compounding the competition. Get ready to see some mind blowing sale prices.
More Madness in the West End. As more and more buyers are quickly getting priced out of the Toronto market, we will see a frenzy in the west end. We predict that sales prices will continue to skyrocket and that the competition will only get worse. With increasing competition, lower than average inventory and skyrocketing sale prices, many first time buyers and condo-to-house upgraders will fight to get in under $1M. Home sales over $1M will see heavy competition from foreign investors.
Bidding Wars on Condo Rentals. As competition becomes too much for many buyers in Toronto, we’re going to see several buyers get priced out of the Toronto market. With the desire to maintain a downtown lifestyle, more buyers will opt to rent. More competition, and fewer options, means higher rental rates and bidding wars on condo rentals.
Condo Sale Prices Will Jump. With many buyers wanting to enter the real estate market, but getting priced out of the housing market, we predict condo sales will spike. As a result of more competition, we will see buyers battle it out on condos causing prices to jump from the average increase of 6% year over year to as high as 10%.
Regulatory Changes Coming Soon. The real estate market the GTA will not be able to sustain this level of growth for much longer. To avoid a potential housing recession, we predict that we are going to see changes around how buyers qualify for mortgages, interest rate increases and stops to slow down foreign competition. As result, we will see a cooling effect, resulting in less competition and less ridiculous sales prices.
Buyer Fatigue Will Ensure. As more and more buyers get priced out of the Toronto (and Mississauga) market, buyers will grow tired of the gruelling competition. Expectations will become more realistic. Finding the “perfect first home” will no longer be achievable and buyers will settle for less.
If you’re thinking about buying or selling, but aren’t sure what to do, shoot us a text or email with your questions or concerns. We’re here to help.