Over the last few years I have been told by many people that they are planning to sell their home but are waiting until the ‘right time’. They are waiting for the market to ‘peak’. They have often asked me to predict when that time would come and my answer was always the same. I always noted that, if nothing in the climate changed house prices would continue to rise in the GTA. Changes in the climate could include, an increase in interest rates (which is inevitable), an explosion at the Pickering Nuclear Plant (highly unlikely) or the government changing the rules of real estate trading. This last one happened on April 20th, 2017 and the market has reacted. If you have been sitting on the fence, waiting for the market to ‘peak’ that peak has been reached and is now behind us – at least for now.
There is no doubt that there has been an unprecedented rise in house prices year over year. In March house prices were, on average 24.9% higher than in March of 2016 (source – TREB). Foreign buyers have been blamed for much of this but empirical research done by the Toronto Real Estate Board (TREB) does not support this. A survey done by the board last year revealed that only 4.9% of home buyers in 2016 were foreign based. 50% of those buyers (2.49% of all buyers) were foreign buyers who were purchasing homes to live in when they emigrated to Canada, as my own family did when we moved here. My own view is that the rise in home prices is due simply to a supply and demand situation. The population of the GTA is now 6 million. Statistics Canada projects that this number will rise to 8 million by 2026. The solution to our housing problem will have to include a significant increase in housing supply over the next 10 years.
Meanwhile, housing has become unaffordable for many and the Provincial Government, facing a daunting election challenge next year has acted to bring prices under control with 16 new measures designed to reduce demand, increase supply and discourage speculation in the market. Click here for the Details of the Ontario Fair Housing Plan. Please note that if this plan does not reduce prices the government will be back with more measures. They cannot afford to go into an election campaign next year without some success in this area.
This plan has had the desired effect. As you know, I study the housing market daily and I have seen a dramatic change in the market since the government announced their plan. Homes that would have sold a month ago, in 5 days with multiple offers did not sell last week (the last week of April 2017). This may be temporary. I know that my own buyer clients are holding off, waiting to see where house prices go before making their purchase. But there are always buyers, people who have no choice but to buy now, for one reason or the other. So, some homes did sell – but the market has certainly cooled.
If you are enjoying your home and have no plans to sell over the next 2 or 3 years then continue to enjoy your home. Your investment should continue to be secure. However, if you have been waiting for prices to reach their peak then that moment has passed. You will not lose money by selling now (unless you were speculating), but the apparently out of control run up of home prices has ended. Spring has always been the best time to sell. This combination of a major market shift and the spring market make this the best time to sell your property this year.
If you do decide to sell please call me. You will need a real estate broker like myself, with experience in selling houses in a buyer’s market. Someone who knows how to sell homes that have to be marketed to buyers and who has had the experience of negotiating with buyers who have a choice in the house that they buy. You do not want an agent who has only had their licence for 2 of 3 years and whose only experience has been in a wild seller’s market.
Call me to find out about the multi-point plan that I have successfully used to sell homes in all markets or if you just want to talk about the present changes in the marketplace.
I’ll be happy to help you. Contact me by completing the form below.