Did you ever think you’d live to see the day when the average price of a detached home in Toronto hit almost $1.8 million?
That’s a 21% jump from last year alone. New listings in October were down 34% overall in with would-be sellers sitting on the sidelines, unwilling to sell their home until they find their next home. Chicken or the egg?
The lack of homes on the market has led to a glut of frustrated and out-bid buyers. This is compounded by the fact that 41% of people in the market today are first-time home buyers (not trading real estate) and immigration is set to rebound in this post-pandemic recovery. Finally, about 25% of all transactions in the last 12 months were investor purchases (adding to rental stock, but further squeezing out end-users.) All of this leaves us with a fundamental lack of housing inventory to meet buyer demand.
Is there hope in sight?
Some financial experts estimate that the Bank of Canada rate may increase by as much as 75 basis points over the next 12 months, but history tells us that such measures did little to dampen the home-buying demand. The reality is that we’re in a housing shortage that is not going away anytime soon.
So, what do you do?
Whether you’re buying for the first time or upgrading to a larger home, overcoming these market conditions is going to take a little more creativity, patience and possibly some concessions. Such as buying a home with income potential or that bigger fixer-upper in an up-and-coming neighbourhood.
This is where working with a trusted Real Estate Agent (a-hem, me) and a good mortgage broker will guide you through this process and show you options that you might not have considered.
The goal should always be the same; get the best mortgage rate you can and get into the market when you’re ready.
Your future self will thank you.