October’s sales numbers came out yesterday, inline with my forecast. The market picked up in September and that momentum rolled into October. Buyer confidence has improved and I expect this positive report will support momentum through the rest of the year. If you are a buyer, the good news is that there is 75%+ more inventory when compared to last year. The bad news is this market could easily heat back up.
Today, statistics Canada reported more jobs were created than expected in October, even as Canada’s economic growth tapers off. This has increased the likely hood of an interest rate hike in March, just as the spring real estate market will be warming up.
How an interest rate hike, combined with the new mortgage restrictions in January will affect the market, remains to be seen.
Toronto’s real estate market has never really aligned with broader economic fundamentals and seems to shrug off mortgage policy changes with little-to-know effect. This is what has made the Toronto market very scary for some.
Based on the type of sales and demand I am seeing downtown, I continue to see the market being competitive, but with more realistic price growth. Having said that, I believe there is a slightly better chance of the market heating up through this spring then slowing down. In the near term, buyers trying to time the market may have missed the bottom. Again, the good news moving forward is there will be more inventory when compared to the last couple years. Finding that perfect property or investment while sifting through all the noise will be key.
The condo market is another story, which I will touch on next week.
-Nick Horton, Nov.3/2017
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