The Bibby Group | April 2019 Newsletter
After a predictable winter season, the downtown Toronto condominium market continues to outperform the entire Greater Toronto Area housing sector. The overall number of new condominium and townhouse listings has declined since last year, and the core is in desperate need of new supply. In fact, the spring market already has seen quick turnover and bidding wars—which were expected to dissipate—and the pace has been much more aggressive than the 2018 fall market. And now that interest rates have stabilized (there is even discussion of rate cuts in the future), all signs are pointing towards an active spring.
While our team has been busy at work, our buyers have had to act quickly, and our sellers have all experienced success in their own regard—be it through record sales or quick turnaround. Recent data from the Toronto Real Estate Board suggest that condominium prices are up by 9.4% since last spring, while freehold properties in certain central pockets are up by as much as 12%. While I am not suggesting we will see these types of gains consistently throughout 2019, based on this early pace I think we can expect an average of 6–7 percent growth, with pre-construction prices continuing to skyrocket.
Despite the federal government’s new housing affordability program, the OSFI stress test has continued to impact buyers’ ability to qualify for mortgages. Existing provisions regarding lending guidelines need to be reviewed. The stress test will only contribute to lower supply because current homeowners will not move due to affordability.
We can expect the market to peak after the upcoming long weekend! I look forward to reporting back to you in May with an update.