08 Sep Market Notes: Bounce-back in sales growth and appreciation
August’s sales statistics came out this week and showed a bounce-back in sales growth and appreciation.
The belief is that sales growth in August and earlier this year will continue into the fall, as demand will pick up when buyers return with a renewed sense of confidence.
“Market conditions in the summer of 2018, including this past August, were tighter than what was experienced in the summer of 2017. In August, the annual rate of sales growth outpaced the annual rate of new listings growth. We only have slightly more than two-and-a-half months of inventory in the TREB market area as a whole and less than two months of inventory in the City of Toronto. This means that despite the fact the sales remain off the record highs from 2016 and 2017, many GTA neighbourhoods continue to suffer from a lack of inventory. This could present a problem if demand continues to accelerate over the next year, which is expected,” said Jason Mercer, TREB’s Director of Market Analysis.
Comparing market statistics year-over-year is risky because last summer people were still figuring out the impact of the non-resident tax. The market literally changed overnight and as such, it is hard to put much stock into the year-over-year comparison. More important is what is happening right now, and this year the market has been gradually moving towards seller’s market conditions.
Realistically, many buyers downtown wouldn’t have really noticed that the market was ever in their favour. Bidding wars only subsided marginally last year and it’s difficult for many to asses a good deal in a competitive scenario. If you are still trying to time the market, unfortunately, you are too late.
But there is good news. Overall, debt is still cheap and Toronto is further developing to become a more attractive place to live. Knowing about where the city is gentrifying and the factors driving real estate prices in specific areas is going to provide the lifestyle you seek and/or the return you are looking for.