That is the looming question in the back of everyone’s mind. The market is slowing, homes are not selling as fast and prices are dropping number by number. Is this the sign everyone has been waiting for?
The Toronto Regional Real Estate Board (TRREB) reported 7,283 residential sales in May, a 39.8 percent decrease year on year. Experts believe potential buyers are looking for interest rate hikes and increased supply to cool prices. With rising interest rates, a decrease in demand, and an uptick in listings, it looks like Toronto is moving into a more balanced housing market.
As the Bank of Canada gradually raises interest rates, prices may rise, but on a more moderate trajectory. In addition to interest rates, inventory is another key issue in the Great White North housing market. According to data from Canada Mortgage and Housing Corporation (CMHC), year-to-date housing starts are up in May 2021 compared to the same time a year ago. These numbers point to a soft landing and not a crash in the market.
Taxation is the go-to solution for any proposal to curb overpricing, but there are other ideas that would have more of a long-term positive effect, according to two RE/MAX executives. Add a mandatory condition to every offer, making the purchase conditional on financing and introducing an industry "watchdog" to review transactions where homes are sold well over asking price.
It remains to be seen whether the Toronto real estate market will crash or not. The unknown continues to linger, and we are all unsure of what is to come next. It is best to deal with what we have now, make it work, rather than overly stress about what this could mean for the future. Truth be told, we are all in the same boat trying to navigate this ever-changing market!
