Spring has arrived in the real estate market.
The city [Toronto] is experiencing a steady increase in activity across all price points and property types. Buyers are stepping up to play, with prices reaching peak prices in February 2022. The only thing holding us back is the tightest inventory levels in decades, so affordability is secondary to buyer motivation. This is due to the tightest inventory levels in decades. The current state of affairs is a result of the deepest, sharpest housing correction in a half-decade.
Buyers are willing to throw caution to the wind and shoot their shot if economic hard-landing lies ahead. This is especially true for older clients who are considering downsizing into a condo. The last year has likely included feelings of regret for those banking on their homes to fund their next act.
The past 12 months have seen a slowdown in transactions and prices, leading to many questioning if they had missed their opportunity to catch the top of the market. Now that things are humming again, there is a new sense of urgency in getting to market.
Clients are now moving into purpose-built rental buildings as an interim solution while still getting their houses up on the market. If enough older homeowners cycle out of the housing market, this could unlock the chessboard allowing for some movement. Agents have a list of move-up buyers waiting in the wings. Will this make prices come down? Probably not.
Interest rates at 6% are not preventing average sale prices from falling, but insufficient inventory is the real issue. Municipal governments are not prioritizing getting housing built, and the federal government is welcoming immigrants with no concern. If interest rates come down, the cycle will start all over again, which will be terrible news for the generation of Canadians priced out of housing.