The Home Buying Stretch in Toronto Realestate

Toronto In AutumnWith rising take home pays, reductions in utility costs, and interest rates that continue to remain steady, home affordability is easing for many hot Canadian housing markets. Home ownership costs have become a little more affordable given these factors. The housing momentum has had especially energetic activity in Toronto, Calgary, and Vancouver. There is no doubt the hottest prices are in these three cities, driving the gains nationwide.

Toronto has seen relief in home affordability for the first time in a few years. Single-family homes are still a stretch however, with condominiums and townhomes offering housing costs more in line with what a typical household can afford. Sales are on the upswing, with the Toronto Real Estate Board reporting a sales increase in recent months by almost ten percent from a year earlier, and the average home price of approximately $560,000 is up seven percent.

Nonetheless, young families in Toronto are driving up demand for single-family homes with little supply. The decline in active listings and the increase in buyers have resulted in bidding wars and competitive offers from potential buyers. With rising home prices, some analysts have previously considered this a sign that Toronto was poised for an overheated market, but the real estate sales figures continue to point at a healthy local economy.

Low borrowing costs have aided homebuyers in carrying the price of a home and many analysts point out this trend will continue throughout 2015, with moderate increases in the prime rate. The best bet for homebuyers is to lock in to a fixed-rate mortgage. With such a high demand and low supply currently in Toronto, homebuyers are often bidding against a dozen other buyers. It is vital for homebuyers to get ahead of the game on the inspection process and come to the sellers table with little to no financing conditions.

With home prices increasing and supply dwindling, Toronto is poised to join the ranks of Vancouver as one of the most expensive cities in Canada. Concerns continue over whether or not these regional markets will force mortgage rates to go higher at some point in order to cool the market. This would penalize homebuyers in other Canadian markets that do not have home prices that are such a stretch for homebuyers.

In the other hot markets, Calgary remains attractive with prices having risen over the past year. The biggest concern for Calgary is oil prices weakening, which could result in a weaker rate of home price growth for this area. Vancouver remains expensive and the city is really a seller’s market. Vancouver resales are at their highest in several years and whatever price a seller sets is generally the price a seller gets. Beyond these hot markets, wide regional differences do still exist.

With continued high demand and constrictions on available land, especially due to geographical constraints, the housing market will most likely continue to see continued strength. Coupled with increases in the local populations due to interprovincial migration and international immigration, the hot markets, including Toronto, are poised for significant real estate growth in the coming months and years.