And we’re back.
For the past six months or so as interest rates have steadily risen, there has been a bit of a lull in the downtown Toronto real estate market. Many have been waiting for a full-scale correction and for prices to plummet. Well, I think it is fair to say that this is not going to happen, at least not in the city core. It seems we have gone right back to where we were with offer hold-back dates, multiples bidders and sales for more than the asking price. The market may not be as active in the 905 or surrounding areas but in downtown Toronto, things are selling again at a steady clip. If there is any price adjustment it is happening in the high end 2.5m plus range luxury market. Properties that are priced in and around the million-dollar range are selling again, and fast. There is always a queue of buyers in this entry level market.
So why are still reading about the market being down in the media? There is often a delay between what is happening on the street before it gets written about. Stats show that we are down month-to-month, and everyone seems to hang their hat on that. No one is talking about the 20+ offers on a property that happened last night. Or at least not yet. But the news will be out there soon enough. People are adjusting to the newer and higher interest rates and are doing what they must to make things work out.
When it comes to analyzing potential investment properties, we still have to consider bottom-line returns. For the past several years, too many so called investors had been throwing out the fundamentals and over-paying regardless of the bottom line or lack thereof. Now that the market is slowly creeping back to where it was, will this start happening again? With interest rates going up, the monthly proceeds for most landlords with mortgages will be likely less. Time will tell but I expect there to be a very marginal decrease in the value of duplexes and triplexes, if at all.
Toronto Housing Action Plan
The city reaffirms its commitment to deliver more housing supply, choice and affordability for current and future residents.
Where are interest rates going?
Interest rates did not go up again this month, but many are wondering how long this will last.