The GTA housing market is still going through an affordability challenge.
There were more homes available for sale, aka active listings, this year compared to last year, up by 23.1%, but buyers still faced competition. The average time it takes to sell a home decreased to 29 days, down from 42 days last month.
Overall GTA prices continued to gradually increase with a moderate 1.3% rise in the average price compared to last year.
There were 6,560 sales in March, down by 4.5% compared to last year, due to the Easter holiday falling in March this year versus April last year. Moreover, fewer people are looking to move as we face a higher interest rate environment and affordability challenges.
The market for low-rise homes remained competitive because of the lower number of homes for sale, resulting in multiple offers returning.
The rental market is showing signs of weakening. The government has indicated their aim to significantly reduce the number of non-permanent residents which could add to the decline in the rental market in the future.
Buyer confidence is picking up.
However, sales for the first quarter of 2024 ended up by 11.2% year over year! One buyers are getting used to higher interest rates. Two the rate cut enthusiasm is helping with the confidence. Homeowners believe the market will improve in the spring. This has led to more homes being put up for sale this year.
If borrowing costs do go down soon, we expect more buyers to (re)enter the market, and more homes to be sold which will continue to push prices further up.
Canada’s New Mortgage & RRSP Policy: Pros and Cons
Last Thursday, it was announced that the federal government will allow 30-year amortization periods on insured mortgages for first-time homebuyers purchasing newly built homes. This change will be effective August 1, 2024 and it is aimed to help buyers get into the market with lower monthly mortgage payments, or qualify for a bigger mortgage.
The government also announced they are increasing the amount first-time buyers can take out from their RRSPs to buy a home, from $35,000 to $60,000, which kicks in on April 16th.
Pros:
- Lower monthly payment: If you have a $500,000 mortgage at a 5% interest rate, your monthly payments could drop from $3,000 to $2,700.
- Ability to borrow more: you can now qualify for a bigger loan and get into a home that is better suited for your family
Cons:
- Pay more interest over time: That $300 less each month will cost you a whopping extra $162,000 over the life of the loan.
- Drive up housing prices: letting people borrow more money, the demand intensifies, the price goes up.
- Less money for retirement: The more first-time buyers dip into their retirement savings for a down payment, the less money they can grow for retirement.
In the end, this new policy might help some people afford their first home, but it could also make houses more expensive and leave people paying off their mortgages for much longer.
If you’re planning to make a move or need some guidance through these changing times, call me for a free consultation today at 647-504-0690.
Email or call us to get insights on your neighbourhood stats or an up-to-date appraisal of your home.
📱Phone: 647-504-0690
📧 Email: steven@mistersauga.ca
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