Speed read – TL;DR:
⚡Average prices have increased by 15% year-to-date!
⚡BoC hikes 25bps again — and there may be more to come.
⚡Strong immigration is causing rental market to go crazier!
⚡Five TRREB districts price comparison – Toronto, Peel, Halton, York & Durham.
GTA Market – Strong growth year-to-date
We are in the middle of the Spring market and GTA real estate market is continuing its strong rally from the second half of last year.
Strong numbers month-over-month across the board. Average price is up 3.7% from April currently at $1,196,101! While prices are still down 1.2% from May 2022, but 2023 year-to-date, prices have increased by 15%!
This upward pressure on price is from the lack of supply of homes. There aren’t enough listings to keep up with the demand, as new listings decreased by 19% over the same period, and inventory levels are still at historic lows.
Even though interest rates haven’t come down, home buyers are buying within their means in the “new normal” financial landscape.
BoC hikes interest rate again — and there may be more to come.
Surprisingly, the Bank of Canada decided on Wednesday to raise its benchmark interest rate by 25 basis points, bringing it to 4.75%. This decision was prompted by a combination of factors, including stronger than expected economic data, a thriving job market, and persistently high inflation.
Big Banks have now all moved to match rate hike, moving prime to 6.95%, a level it hasn’t seen for 22 years. Consequently, homeowners with variable interest rates will encounter higher mortgage payments.
For individuals seeking to purchase or renew mortgages, we recommend considering short-term fixed-rate options spanning 1-3 years, as these are expected to offer more favourable interest rates.
Moreover, bond market pricing now implies a 100% chance of at least one more 25bps hike this year. The next Bank of Canada announcement is scheduled for July 12th, 2023.
Strong immigration is causing rental market to go crazier!
We had a record number of newcomers to Canada in the first quarter of this year. The original target was 465k, but we are currently on pace to bring in 580k newcomers. That’s 25% MORE than the target.
In April, the number of non-permanent resident permits issued surpassed previous levels by a staggering threefold.
Moreover, there has been an unprecedented influx of temporary residence applications from Ukrainians, with a staggering 835,097 applications approved within the last 12 months.
We aren’t building enough homes, with most newcomers coming to the GTA, rental is getting expensive, fast. The rental market is reflecting this as 1 bedroom condo rentals have increased by 15.1% from last year, and now averaging $2,474 per month.
Also with the new and potential future interest rate hike, fewer buyers are going to afford a home at today’s price. Buyers hitting pause on their search still need a place to live which puts pressure on rents. So any potential slowdown we see in the market for resale housing market will likely be matched by an increase in demand for rentals.
We just rented out a 1+den within 24 hours of listing, we received 3 offers and 2 of them offered to pay the year of rent upfront. If you’re looking to get into a condo, this is the time to do it. It’s the only segment that hasn’t rebounded yet and rent is on the rise.
TRREB district price comparison – Does it surprise you?
The chart below shows you the price changes in the five TRREB districts: month-over-month, year-to-date and how each district is currently compared to the peak of Feb 2022. Notice that Toronto has almost fully rebounded to the February 2022 peak price.
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