There’s been a lot of chatter about home prices reaching record high’s in Canada for years. The focus has mostly been on our two biggest cities, Toronto & Vancouver.
According to the Bank of Canada this past week, house prices in May were 30 percent higher in Van and 15 percent higher in Toronto than a year ago. So no, you haven’t been dreaming, prices have reached crazy new levels.
You’ve probably heard things like “the bubble is bound to burst” or “things can’t stay like this forever”. It looks like banks and the government are starting to see that potential cooling down of the market on the horizon. Anytime soon? Unlikely so expect the frenzy to continue.
The reality is that there have been so few semi and detached houses built in the city over the past 20 plus years so they’re going to continue being in higher and higher demand. If you’ve been out there looking, you know full well that supply isn’t even coming close to meeting demand. As soon as a listing in Bloor West or High Park hits the market for example, it’s like an immediate swarm of bees on honey. So the burning question, what do to? Wait or take the plunge?
One of the big reasons sellers are more reluctant to list is that with the amount the Toronto land transfer tax sucks out of your final profit, people are discouraged and thinking, even if I get a great return on my home, where can I move? The reason behind the lack of supply.
If mortgage rules change or amortization periods are tweaked, there’s no doubt it would have a drastic impact on the market and prices. It’s unrealistic to think that 15 percent growth year over year is the norm but it’s equally unrealistic to think that things will all of a sudden become more affordable. There’s no guarantee that playing the waiting game as a buyer will ever pay off. If you talk to people who bought houses in the West End in the 80’s or 90’s you’ll notice a common theme – they had to pay to live in a great neighbourhood and that won’t change, ever.
Around the hood
From Thursday to Sunday it’s the Sidewalk Sale on Bloor, from Jane to Runnymede so you know summer is in full swing! If you’ve never checked it out, most of the shops along Bloor open their doors and all of their products spill out onto the walkways – a great time to come for lunch and do some shopping.