Ontario real estate

Real estate in Canada has seen steady growth for many years now. The Canadian real estate market has defied global trends by outperforming markets in other countries year after year. Even after subprime mortgages led to the near collapse of the US housing market in 2008[1] and the dire predictions that Canada’s real estate sector was sure to follow, we continued to post gains in our residential property market. The strength of our real estate sector is due in large part to continued low interest rates, a mortgage market largely insured by the government-funded (taxpayer funded) CMHC and stricter lending practices than in the US. However, according to many experts, the gain train might be slowing. In 2014 the global residential property market was uneven with countries either showing growth or softness depending on the nation’s economy. Canada is one of the countries that came out ahead in this respect, posting housing price increases of 6% year-over-year. While this is a reflection of the country’s average increase, it really is an expression of the strong gains seen in the prime markets of Vancouver, Calgary and Toronto[2]. Short-to-Medium Term Outlook The short-term outlook for the Canadian housing market including the Toronto residential property sector remains rosy but cautious as talk of rising interest rates might dissuade first time buyers from entering the market. However, as interest rates have not yet started to rise, it is likely that those who want to get into the real estate market before the rates increase will do so in the short term. As Toronto is one of the country’s most expensive housing markets, it can expect to see a growth of less than 3%[3], which is less than half of what is projected for the rest of the country. However, given the cyclical nature of the property market, experts are expecting that the upward trend will start to slow and the sector will enter a downward phase in the medium-term. According to Scotiabank’s Global Real Estate Trends Report published on Oct. 9, 2014: “We expect home sales will slow in 2015 and beyond alongside a gradual upward drift in borrowing costs, tempering new and resale prices over the next several years.” While Toronto’s property prices are considered to be stretched in the metropolitan areas, the suburbs and the larger Ontario real estate market have a more moderated outlook as valuations have not yet been saturated by accelerated growth. However, given the attractiveness of living in the urban centre and the desire by many new home owners for a shorter commute to their workplace and a distinct trend in leading a “green lifestyle” by living and working within walking distance of all services, don’t expect housing prices in Toronto’s core to drop by very much either in the short term or the long term. [1] //bit.ly/1y55APD [2] //bit.ly/1z9uEad [3] //bit.ly/1z9uEad