Toronto Suppliers Gained An Edge in 2019

 

In a surprising turn of events, Toronto homebuyers have gained bargaining power due to the increased supply of real estate in the city. Inevitably, this meant that homefinders in Toronto bought the houses for softer prices than the month before.

All this was revealed in a comprehensive report by Central 1 Credit Union. The report discusses the unemployment rate, non-resident permit and the housing sectors. Perhaps, most notably, the report points out that increased supply of real estate properties had an impact on the price growth. This empowered the buyers to list down a negotiated price.

According to the report, Toronto MLS Listings witnessed a 5.3 percent growth. In total, 674 new homes were listed in the January. Meanwhile, the sales rocketed to 6,851 units, up 3.8% from the last month. Homes that were sold stayed an average 33 days on the market. Comparatively, the average days in December 2018 were 31 days.

Of course, the days on the market were impacted by recent weather woes of the city. Toronto was covered in snow at the start of this year which meant that many potential buyers were confined to their homes.

The average Toronto home price was also affected by a higher sales of condos which are much more affordable. At $777,579 month-over-month, the average price decline to 1.6 per cent.

Central 1 Credit Union’s report point out that the demand for housing will remain moderate, in-line with January’s activity. Consumer will focus more on debt servicing and will be more conservative with their spending as the economy is expected to slow down.

The current trends may temp a lot first-time buyers to get into the market. However, they should take few things into consideration.

1. Home Prices Will Remain the Same

Without a doubt, the Toronto real estate market has changed for the better. The days when prices increased by double-digits, bidding wars were ruthless and new record prices were set every day, are far behind us.

Ever since the Ontario Fair Housing Plan was released, the market became much more stable. Price increase and decreased but not to a level where anyone would notice. Government is increasing prime rate and making monthly mortgage more expensive to stabilize the market. So if this policy continues (and there’s every chance that it will), there won’t be any significant drops or increases in the real estate prices.

2. Rental Prices Will Increase

Real estate prices in Toronto increased by 63% from 2013 to 2018. In the same time, the rental prices only went up by 35%. Most of the increase came in the last 2 years. Landlords will use every trick in the book to make the rent more in line with their property’s value. They will argue that the rent should match what their home’s worth.

This unfortunate occurrence will put even more burden on anyone who wishes to buy real estate. When the cost of rent goes up drastically, it will be hard for anyone to save up a down payment. Rental vacancy still lingers under 1% in the Toronto area, so with the demand being so high, nothing will stop landlords from demanding more price.

3. Laneway Will Play a Role

In some good news, laneway housing is gaining great popularity in the metropolitan areas of the country. The government officially allowed this form of housing back in June 28 of last year. Since then, many homeowners have been able to earn extra income by renting out their laneways.

However, the renters too should celebrate an extra supply in the market. As this practices catches on in Toronto, the home seekers will benefit a great deal.