Quick Market Update for Toronto and GTA for May.
Here is a quick market update for Toronto and GTA as well as a simple strategy to beat the market. In case you were not aware of this, I wanted to make sure you know about it when you are making your home purchase plans in the near future. Stats Canada just released new numbers: “The index for the combined region of Toronto and Oshawa was up 1.9 per cent in May, the biggest contributor to the overall increase and the largest jump for the region since 2004.” Here is the full article: http://www.huffingtonpost.ca/2016/07/14/new-housing-price-index-up-0-7-per-cent-in-may-biggest-increase-since-july-2007_n_10989036.html
Market Update for Toronto and GTA – The short summary
As the above Stats Canada market update states, that is 1.9% in one month for Toronto (0.7% for the whole country) and that is an average, so in better areas, it was likely more. It is starting to look as if Toronto may be heading for Vancouver prices! If you are looking to buy a detached home in GTA in the near future, in as little as a few months you may find that your current budget for a detached home, may become a budget for only a semi detached or even a town house. If you were looking for a freehold town house, you may soon be looking at a condominium as your only option.
The raw numbers
Let us say that you were looking to purchase a detached home in Mississauga, which as recent as January, you still could pick one up for $600,000. With the appreciation of 1.9%, that home today, at the time of writing this article (July, 2016), should be close to $680,000. Given that there are no detached homes in Mississauga currently selling below $700,000*, it means that Mississauga must have surpassed the 1.9% average. *(not including the listings that have below market asking price to start a bidding war and therefore sell for much more)
The bad news about the current market
As I am buying and selling on behalf of my clients in GTA every day, so I can tell you with great certainty that majority of the buyers looking for properties under $700,000 are having a very difficult time finding properties within their desired price range. Those buyers who could afford a particular type of home a year ago, are finding that those homes are now above their reach. This is beginning to mirror Vancouver market where ordinary residents with average white and blue collar incomes can no longer afford a home, or at the very least, the one they could have easily afforded just a few months ago.
Here is the simple solution I had promised you in this market update for Toronto and GTA. If you are one of these buyers that are just below the reach of the desired home, buy a property ASAP or at least in the next 2 months. How does this even make any sense!!! The one thing to consider is that we are in the summer season now with kids out of school and many potential buyers either too busy to shop or out of the country. This means that it will be possible to find better deals. Look for homes that had offer dates scheduled and ask you Realtor to find out if they had sold on the offer date or not. Because it is summer, You will find that a large number will not be sold and will be more open to negotiating with you for a reasonable offer. Just something to think about, if you are thinking of buying a home in the fall or later in few months.