After a quick increase of home sales in Toronto and the GTA, the housing market could be facing a possible market crash.
In February, the Bank of Canada Governor, Tiff Macklem, stated that there are “early signs” of overheating in the Canadian real estate market. The shocking statistics of the last few months have many sounding the alarm that the housing industry is soaring at an unsustainable pace that could convey a crack once the monetary policy normalizes.
Jason Mercer, the Toronto Regional Real Estate Board’s chief market analyst, stated in a recent news release that additional growth could occur due to the fundamentals: rising demand and limited supply.
So what can “cure” this overheated market?
According to Christopher Alexander, Chief Strategy Officer and Executive Vice President at RE/MAX of Ontario-Atlantic Canada, and Elton Ash, Regional Executive Vice President at RE/MAX of Western Canada, this is how we can have a more positive long-term effect on our perspective housing market:
- Add a mandatory condition to every offer, making the purchase conditional on financing.
- Implement an industry “watchdog” to review transactions where homes are sold well over the asking price.
- Introduce more housing supply.
Although Toronto is soaring with sales, home buyers, and an increase in real estate, I can not help but wonder what this will all equal in the years to come.
What are your thoughts?