Some forecasters have predicted that a strong spring real estate market in the GTA is off the table this year. We would argue however that the strong spring market has already started – and much earlier than usual!
According to Brandon Weiss of Harvey Kalles Real Estate Brokerage, “The spring market in Toronto started early this year with listings being up 45% in February as compared to last year. This is not a “sell-off” in my opinion but more of an example of sellers realizing that there is no need to wait for warm weather to get strong value for their homes.”
The number of real estate transactions that took place in February alone, came in at a staggering 7256. Not only is that a huge increase since the same time last year, but it is also quite a jump (14.8%) from just a month before.
What does this mean for the traditional spring months? Most likely, you are going to see far fewer home listings that you normally would in the months ahead. And fewer listings means a more competitive market for sellers. In other words, higher prices.
We will likely see a small dip in prices before they rise.
While we do expect the cost of real estate in, and around Toronto, to continue to rise this spring and over the course of 2020, we also suspect that there will be a bit of a pullback in the housing market first.
Mark Adelson of Harvey Kalles Real Estate Brokerage points out that the real estate market in the GTA will not go unaffected by fears of the coronavirus.
The coronavirus has had a huge impact on the stock markets and global businesses as it has interrupted both travel and supply chains. Add to this the amount of decline that has been caused by fear, and it has led to the most severe market drop in 70 years.
“In my opinion,” says Adelson “we will see a little dip in the market over the next few weeks until the stock market corrects itself after the coronavirus scare. This is because the stock market took a massive hit. A lot of people’s deposits were tied to the market.”
Until health departments are able to get a handle on this virus, we can still expect to see extreme volatility in the stock market and a temporarily depressed real estate market, if you would even call it that.
Lower interest rates will help to boost affordability
On March 4th, the Bank of Canada announced that it would be lowering its interest rates from 1.75 percent by half a point down to 1.25%. While this was done to lessen the economic impact of the coronavirus, it will also help mortgages to become more affordable for homebuyers in the GTA. But while mortgages may be more affordable, this is likely to drive home prices even higher.
Contact us today
If you are considering purchasing a home in the GTA this spring, it is best to act sooner rather than later if you would like to get the best bang for your buck. Contact us today if you would like to talk.