Toronto Loft Conversions

Toronto Loft Conversions

I know classic brick and beam lofts! From warehouses to factories to churches, Laurin will help you find your perfect new loft.

Modern Toronto Lofts

Modern Toronto Lofts

Not just converted lofts, I can help you find the latest cool and modern space. There are tons of new urban spaces across the city.

Unique Toronto Homes

Unique Toronto Homes

More than just lofts, I can also help you find that perfect house. From the latest architectural marvel to a piece of our Victorian past, the best and most creative spaces abound.

Condos in Toronto

Condos in Toronto

I started off selling mainly condos, helping first time buyers get a foothold in the Toronto real estate market. Now working with investors and helping empty nesters find that perfect luxury suite.

Toronto Real Estate

Toronto Real Estate

For all of your Toronto real estate needs, contact Laurin. I am dedicated to helping you find that perfect and unique new home to call your own.

 

CMHC’s Toronto Real Estate Market Outlook

Existing Home Sales Remain Strong

While the overall economy will register its worst performance since 1991 this year, remarkably sales in the Toronto real estate market will exceed last year’s level. The 82,000 homes sold this year will be up 7% from 2008 and well above the average for this decade. Next year, sales will moderate slightly to 78,000 units and become aligned with the historical ten-year average. Strong demand mixed with lower listings this year will elevate growth in average prices to 3.3%. While the market will experience more balanced conditions next year, the average price for 2010 will grow by 5% compared to the 2009 average.

Annual Toronto Real Estate Price Growth

Annual Toronto Real Estate Price Growth

The strength in Toronto real estate activity this year is reflection of the aggressive interest rate cuts initiated by the Bank of Canada to stimulate growth in the economy. This policy response worked better than anticipated in the Toronto real estate market. Record low borrowing costs and price discounts accumulated during the winter months lured droves of buyers into the market. Pent-up demand from first-time buyers priced out of the market in 2008 and future demand from move-up buyers capitalizing on the improved level of affordability brought sales levels to new highs this summer.

Yearly Toronto Real Estate Average Price

Yearly Toronto Real Estate Average Price

Incomes continued to rise this year while the mortgage payment on an average-priced home in the GTA fell to $2,166 — down from $2,407 in 20081. However, as the stimulative increase in demand becomes satisfied and market conditions begin to reflect underlying economic fundamentals, sales will slow. Affordability will moderate slightly next year, but will remain in check due to slow price growth and incremental interest rate increases.

The average mortgage payment will rise to $2,318, still below 2008 and 2007 levels. This will provide some support for sales while income growth slows and employment challenges persist next year.

Sales for single-detached homes will increase the most this year and capture more than half of all sales in the GTA. A longstanding trend that has seen single-detached homes represent a declining share of resale purchases has stopped in 2009 as improved affordability is allowing households to expand their options in the resale market.

Annual Toronto MLS Sales

Annual Toronto MLS Sales

There are also economic and demographic forces that favour move-up buyers. As a result, higher-end locations such as Central Toronto, York Region and Halton Region will experience the greatest rise in demand this year. The trend favouring activity for single detached homes is expected to begin slowing in the second half of next year and reverting back towards multi-family dwellings as affordability erodes.

Balanced Market Conditions Next Year

While sales levels have rebounded this year in the resale market, new listings have moved in the opposite direction. This is a reflection of the strong presence of first-time buyers in the market this year. Aside from the improved affordability conditions, the expansion of the Home Buyer’s Plan and the introduction of the First Time Home Buyers’ Tax Credit have provided added incentives for first-time buyers this year.

For existing homeowners, the newly introduced Home Renovation Tax Credit provides an incentive for households to stay put and invest in their existing home. Furthermore, a sense of uncertainty remains amongst sellers who will wait for the market to show signs of stability before putting their home on the market. New listings will decline by 17% this year to 135,000, resulting in a sales-to-new listings ratio just above 60%.

This will categorize 2009 as a seller’s market — characterized by a rise in multiple offer scenarios and shorter days on market averages. More supply is expected to come on the market next year as confidence amongst sellers improves and prices move higher.

New listings are forecasted to rise to 150,000 units in 2010, which combined with a lower level of sales next year will result in a sales-to-new-listings ratio of 52%. This will bring the market into balanced territory next year and ease price pressures.

Toronto MLS Listings Forecast

Toronto MLS Listings Forecast

Average Prices Move Higher

Tight market conditions and a compositional shift in sales towards single-detached homes will push up average Toronto real estate prices by more than 3% this year to $392,540. Current selling prices, however, are already above the 2009 average after strong appreciation in the summer months lifted prices back above $400,000 to their peak level reached at the end of 2007.

Price growth will slow as the Toronto real estate market returns to a balanced position with the average selling price for 2010 rising about 2% from its current level to $412,000. In comparison to the average for 2009 as a whole, prices will grow by 5% next year, which in line with the annual average for the decade.

Gradual Job Market Recovery Next Year

The level of employment is expected to rise by 0.8% next year — equal to an addition of approximately 25,000 jobs. The unemployment rate will end the year at a 15-year high of 9.7%. More jobs next year will ease the rate down to 9.4% in 2010. A considerable amount of slack in the labour market will cause earnings growth to slow to 1.2% this year and just a 0.5% increase in wages next year.

As inventories become drawn down and sales pick up next year with an improving economy, manufacturing plants will begin to call back laid off workers. Construction sector employment prospects for next year look bright as more housing projects begin construction.

The Finance, Insurance and Real Estate category will provide the biggest support for the Toronto labour market this year. A strong rebound in the real estate and financial markets has increased the need for more employees working in these industries. Employment in the service sector will receive further support next year from stabilization in goods production.

Mortgage Rate Outlook

The Bank of Canada cut the Target for the Overnight Rate in the early months of 2009. The rate was 1.50% at the start of 2009 and has since fallen to 0.25%. The Bank has committed to keeping this rate at 0.25% through the middle of 2010 unless inflationary pressures warrant an increase.

Mortgage rates have fallen over the course of 2009, but are now expected to remain relatively stable for the rest of the year. Posted mortgage rates will gradually increase through 2010, but will do so at a slow pace. For 2010, the one-year posted mortgage rate will be in the 3.50-4.25% range, while three and five-year posted mortgage rates are forecast to be in the 4.50-6.00% range.

————————————————————————————————————

Contact Laurin Jeffrey for more information  –  416-388-1960

————————————————————————————————————

Leave a Reply

Your email address will not be published. Required fields are marked *