The Fall Market is now in full swing and I expect this activity to go strong until about late October to early November before the activity wanes again. Back by popular demand, here are the Top 5 things you need to know heading into 2019’s Fall market. Let’s start it off with #1.
1) Interest Rate
The Bank of Canada held interest rates on September 4th. Remember that time when I was saying that I just can’t see the interest rates going much higher even though everyone was calling for massive rate hikes after a measly two 25-basis point increases? That was 1 year ago when I made that prediction. Well now, it seems as though the media is going the other way and reporting on predicted rate cuts in the future instead. Oh how the tables have turned! We’ll have to see about that, but have a look at the chart below.
2) Numbers from August 2019
August 2019 numbers were published last week and they are a lot stronger than what most people were expecting. It’s similar to what I reported in July – low inventory and increasing activity, which has led to increasing demand in the micro-markets of Toronto. Pricing also saw a minor healthy increase in one of the slowest months of the year. When you combine all of these factors with a lower number of listings (decrease in inventory), demand will be expected to outpace supply. As a result, prices will eventually will creep back up much quicker than 3%. In case you missed September 2019’s Market Watch video, you can watch it here: LINK. I break down the numbers for September in much more detail.
3) CHMC First Time Home Buyer
The new first time home buyer incentive just kicked in, so expect Torontonians to take advantage of this at the $500K price point. This is the price point that will drive much of the activity in the downtown condo market. As such, expect the bachelors and 1-bedroom units in the core-adjacent areas to the increase in demand. These areas are Liberty Village, King West, Regent Park and even as far as Mimico. Furthermore, the RRSP usage for first time home buyers also got bumped up to $35K, which means that more money can be accessed to buy a first-time home.
4) Lack of Supply
I am expecting less supply during the Fall market as we’ve already seen 5+ months of continuously increased activity year-over-year with fewer listings year-over-year. Additionally, the months of inventory ratio just keeps shrinking slowly and I don’t expect this to change much in September.
5) Buyer Confidence
When you add the above Top 3 things to know for Fall 2019, you get increased buyer confidence in the real estate psychology game. Increased buyer confidence means more people, buyers specifically, looking at the market with less supply. This simply means that we can expect more multiple offers in those high demand product offerings. As a quick reminder, these include entry-level condos, downtown condos under $800K, 2-car garage townhomes and semis in the core and 905, and lastly, detached homes south of Bloor. These are the hottest product offerings and I expect this to continue.
The Wrap – Ultimately, buyers will keep buying and investors should also keep buying. Despite what everyone is saying, even if there is another minor dip in the coming 10 years, I honestly believe that Toronto has one last 10-year run in real estate before stabilizing as a city that average Toronotians cannot afford to own real estate. Then we will become like cities like Paris, London and Tokyo. If you are looking to jump in to benefit from the next 10 years of Toronto real estate prices, do not hesitate to contact me now. You can reach me at Zhen@PrimePropertiesTO.com or call 416-436-9436.
Until next time, Happy Real Estate-ing
Zhen
