January 2nd, 2016
There have been many challenges in the housing sector this past year. There were recent changes to down payment minimums and we saw housing prices increase in the GTA. The Canadian dollar is trading at approximately 69 cents to the US dollar (at the time of this writing). And we have a new Liberal majority Government in Ottawa. There is no doubt that we Canadians are resilient. Despite gloomy predictions, despite increasing debt loads, despite all the changes we have endured.
While the housing market did slow in other parts of the country, Toronto was the exception, along with B.C. There are still some issues surrounding affordability for first time home buyers, yet many economists believe the market will self-correct in the upcoming years.
Our economy is still creating jobs. The U.S. economy, which impacts our economy, is also growing and home prices there rose 5.5% from a year earlier, boosted by job growth and low mortgage rates.
The Canadian Real Estate Association (CREA) is forecasting that low interest rates will continue to support sales and prices in 2016.
In the GTA, many real estate agents were busier than usual in December as mild weather and buyer enthusiasm kept the market humming. Insiders suggest the pace of sales growth may slow somewhat in 2016, but perhaps not enough for first time buyers. However, a recent meeting between Prime Minister Trudeau and Toronto Mayor John Tory may prove beneficial for those buyers as housing affordability was on the agenda. Also, a lot is riding on the federal government’s new stimulus package, which is expected to kick start, the economy.
Yet, there is still talk of “bubbles”. Let’s out that to rest. In a recent CBC News article, Mike Crawley wrote the “5 reasons Toronto house prices won’t crash in 2016”. They are:
1. Supply and demand. The population keeps growing and people have pt live somewhere
2. It’s the economy. If the economy shrinks, people lose their jobs and don’t buy houses. The economist forecast is for growth.
3. Mortgage rates will rise, gently. Rates would have to rise quickly for a housing crash – not going to happen.
4. There is no bubble to burst. Bubbles occur when a lot of people buy a lot of houses on pure speculation. There is no bubble in Toronto.
5. There are still affordable housing options. The average price of a condo is roughly half that of a single-detached house.
The bottom line is that we continue to look on the bright side and consumer confidence is high.
Wishing you health, happiness, and prosperity in 2016.