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.

 

Toronto Real Estate Market Outlook

More Balanced Market Conditions in 2008 and 2009

Following a record breaking year in the Greater Toronto Area (GTA) in 2007, existing home sales will edge lower in 2008 and 2009. More moderate job growth coupled with higher home prices and borrowing costs will result in fewer households purchasing a home in the resale market. Fewer home purchases will especially be noted in the first-time buyer segment of the market. However, even with more moderate sales over the next two years, existing home sales will still remain higher than the average for the last 10 years and in line with the average over the past five years.

Fewer First-Time Buyers

Following a resurgence in first-time buying activity in 2007, when an estimated 60% of home buyers were moving from rental accommodation into home ownership, the number of households purchasing their first home will decline through the end of 2009.

Strong youth employment growth, low borrowing costs and a greater diversity of mortgage products “pulled forward” some first-time buyer households last year who otherwise would have purchased in 2008 or 2009. The result will be a smaller first-time buyer pool this year and next.

In addition, rising required incomes to carry a mortgage on the average priced home, relative to average household income, will prompt some would-be first-time buyers to hold off on their purchase until their incomes and/or savings increase in relation to home ownership costs.

Cost of Home Ownership Increasing

As the cost of home ownership rises over the next two years, fewer households will decide to purchase a home. The required household income to carry a mortgage on an average priced existing home in 2008 and 2009 will be $91,789 and $93,763 respectively. In both years, the required income will be slightly greater than the forecast household income in the region. This will be a departure from the norm observed over the past decade, when the required income was below average household income.

While higher mortgage carrying costs and by extension required incomes will be a drag on home ownership demand, it should be noted that the mortgage market has become more flexible over the past two years. Some households have been able to take advantage of different down-payment structures and amortization periods allowing them to comfortably purchase and pay for ownership housing. Other households, in response to higher carrying costs, have opted for lessexpensive housing types.

The use of more flexible mortgage products and a movement toward less-expensive housing types will continue through the end of 2009. Thus, while some households will respond to the increasing cost of home ownership by putting their decision to purchase on hold, others will remain confident in their ability to purchase and pay for a home over the long term.

More Choice in Resale Market

The decline in MLS sales through the end of 2009 will occur at a more rapid rate than the decline in new listings. The result will be a widening gap between sales and listings, which will provide home buyers with more choice in the marketplace. The better-supplied existing home market will be associated with more moderate annual price growth. When buyers have more homes to choose from, they are less likely to make offers at or above list, or to enter into “bidding wars” with other buyers.

The average existing home sale price in 2008, across all housing types from single-detached through condos, will be $394,000 or a 4.5% increase over 2007. In 2009, price growth will move closer to inflation with an average price of $404,000.

Focus on the Condo Market

As condo completions rebound in 2008, the share held by investors will be of interest. If many investors list their units for sale shortly after completion, there could be downward pressure on price growth in this segment of the existing home market. Based on CMHC’s Fall Rental Market Survey, investors owned between 20 and 21% of registered condo stock. Discussions with industry stakeholders suggest that there could be a greater investor concentration in unregistered projects – perhaps as high as one third.

As projects complete, some of these investors will choose to sell their condos in order to take advantage of increases in market value which occurred during the construction period. These increased sales are not forecast to result in declining values for condos. Currently, the resale market is very tight. Sales accounted for half of active listings at the end of 2007.

Moreover, the number of completed and unoccupied units is very low, ranging between 1,000 and 2,000 units. These tighter market conditions resulted in average condo prices growing at an annual rate of over 10% in 2007. As more supply comes into the marketplace over the next year, however, the rate of price growth will moderate to approximately 5% in 2008 and 2.5 to 3% in 2009.

It is important that average price growth for existing homes remains reasonable relative to income growth over the long-term, allowing for sustained home ownership demand moving forward. This is especially important for the condo segment of the ownership market, which continues to cater toward a growing proportion of first-time buyers.

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

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