Get ready for a wild ride, everyone! The Toronto Regional Real Estate Board (TRREB) just published its yearly forecast and it’s far more thrilling than your typical roller coaster. It appears that the area housing market had been declining rapidly until recently – but now, they’re anticipating an upswing in the second half of 2023. So buckle up – this is sure to be one bumpy journey!
The yearly report forecasts that the average home price will skyrocket to a remarkable $1,140,000 – higher than January’s mean of $1,038,668. Though this appears impressive at first glance, it is 4% lower compared to last year’s figure – an inconsistency which may be perplexing for some. What could possibly cause this variance in the market? It remains uncertain.
In an unexpected development, the board projected that there will be 70,000 sales this year – 7% less than last year. This prediction was based on a poll by Ipsos commissioned by TRREB which showed that more people were considering to buy property compared from the previous year. Furthermore, a higher percentage of homeowners planned to list their homes for sale as well. As such, we have greater potential buyers but fewer actual sales?
Puzzlingly, the Bank of Canada’s decision to raise interest rates earlier this year has been held responsible for the recent downturn in the housing market. Stats show that real estate purchases have dropped by an astonishing 40% in Toronto and home values have decreased by 22%. Qualifying for a loan suddenly became more difficult as buyers hesitated, while sellers waited hoping prices would soon improve before listing their homes – which all combined created quite a conundrum!
The Toronto Real Estate Board has forecasted that activity may remain stagnant in the initial half of this year because of high mortgage rates, which have put purchasing a house out of reach for many. But they anticipate fixed-mortgage products – where interest stays constant over its loan period – to commence decreasing shortly. This will hopefully make buying a home more achievable; however, will it be adequate to elevate sales?
Despite the central bank’s decision to raise borrowing costs, Canada’s labour market has stayed robust and welcomed 150,000 new jobs in January. In addition to that, many new immigrants are expected this year – a record number of which will be settling down in Toronto area. Economists and real estate industry agree that it is likely to give an additional boost for housing demand as well.
According to Jason Mercer, the board’s chief market analyst, the later half of 2023 is anticipated to be a strong period for ownership housing due to decreasing fixed mortgage rates, an overall reliable labor market and record immigration. So there you have it – an exceptionally erratic real estate industry that always holds something surprising in store!
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