January 14, 2019
Toronto skyline
http://scotcleanservices.co.uk/wp-json/oembed/1.0/embed?url=http://scotcleanservices.co.uk/gallery/ Toronto Real Estate Predictions for 2019

A Recap on the 2018 Toronto Real Estate Market The 2018 market was very similar to the second half of 2017, in that it was the year of the condo. It was characterized by millennials attempting to break into the market. This with their price restraints came a large demand for small to medium size condos in the core. This factor helped us see another year over year double-digit price increase. One of the largest components that contributed to this growth was the mortgage stress test. This was implemented to limit lending risks on conventional mortgages.. This meant that if you put 20 percent down or more on a property, a mortgage at 3.5 percent will be stressed two basis points higher at 5.5 percent. There have also been three rate hikes for the Bank of Canada, which started at 1 percent at the beginning of the year and rose to 1.75 percent by the end of it. Essentially, this meant that people got approved for less money and but also cost them more to borrow. Both these combined factors should have meant more downward pressure on the market, however, the highly dense population in Toronto kept the prices high. Throughout the year, detached homes remained fairly stable and semi-detached homes had a great year as they are one of the most affordable freehold options. On the other hand, the aggressive upwards growth of homes in the suburbs from 2017 began to stabilize and return to normal levels in 2018. Real Estate Predictions for 2019 Overall, I predict that the market will experience moderate growth as the mortgage stress test continues to knock people down an asset class. This means that if you are in the market for a detached home, it is likely that you will only be able to afford a semi-detached home. Across the entire GTA, I predict a 3 to 5 percent growth, with a 5 to 7 percent increase occurring in the downtown Toronto core. Condos are expected to have another good year, but double-digit price growth is not expected. This is because the once large price gap that existed between the average price of a condo and the average freehold property has shrunken in the last 2 years. With this being said, there will come a time when an average buyer will be able to spend around the same amount of money on a condo as they would an entry-level freehold property and opt for the latter, which will be an interesting shift to keep an eye on. With the gap being smaller than it has ever been in the past 2 years, we can expect to see a resurgence in detached properties in 2019. It is fair to say that the Toronto rental market, one of the largest in the country, is astronomical. When Kathleen Wynn’s rent control was put into place in April 2017, rental prices skyrocketed & few people moved; creating a lack of inventory issue. Since late 2018 Ford moved to remove rental control on all buildings that were first occupied after this date. The older dwellings are still subject to rent control unless a new occupant is moving in. It would be nice think that a one bedroom will eventually come down from it’s $2200 price tag but it most likely will not. I believe that as the city gets more dense with immigrants coming from wealthy countries we will continue to see condo sizes shrink and their prices go up. As prices go up so will rental rates (and down will go people’s old standards about what constitutes space and value) The future of real estate is here and it’s laying down it’s roots...

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