The most competition is on unique homes in prime neighbourhoods

-Nick Horton. June 15, 2018 

The downtown market is continuing to trend upwards, with the most competition being on unique homes in prime neighbourhoods. Investors still appear hesitant to take on flip or development opportunity. Houses geared towards this segment are sitting longer, sometimes being reduced from lofty price expectations. I am currently keeping an eye on a few of these properties. On a macro level, a myriad of concerns could be keeping speculation at bay, including the rising interest rate environment, Nafta negotiations, and provincial politics. I have heard all three concerns.    

It’s possible investor sentiment changes to a more positive tone over the summer as these issues resolve. Reported today, NAFTA negotiators on both sides of the table are making a push for a deal this summer. On July 11, we will also hear from the Bank Of Canada on an interest rate hike that many economists believe is likely.  It is possible we don’t see an interest rate hike, depending on how the BOC evaluates the impact and uncertainty of the NAFTA negotiations. Regardless, the bank may feel obliged to provide more direct guidance on the pace of hikes in the future, as there is growing concern around investment in this country. Provincially, we will hopefully see a fiscal plan from the Progressive Conservatives and Doug Ford, either through a fiscal budget or clear policy outlines.   

Specific to Toronto, sales statistics moving forward will compare more favourably to 2017 sales statistics, post non-resident tax. The resulting media coverage and run up in pricing this Spring may sustain a more balanced market overall, with downtown continuing to out perform the 905.