While the weather outside may be finally warming up, it’s not the only thing that is going through a spring thaw and getting hotter with a new season: the housing market is also following suit. And while many buyers are still struggling amidst the reality of the new mortgage laws, and the limitations it puts on their purchasing, as CEO of Royal LePage says, “there’s still a lot of demand for homes, even if people’s capacity to buy has diminished,” and “this spring, people want to talk” about these needs and demands.
The TREB predicted a slow start to the year with the new stress test in place, compared to other years of historically high sales, but then anticipated a rebound to occur in the spring. With February marking a 33.4% drop in sales, the prediction did indeed hold true, while we are now beginning to see the expected rebound.
Spring is usually a brisk season in the Toronto housing market, and some professionals claim it has been since 2013 or 2014 that the city has experienced the typical spring season housing behaviour, marked by lots of properties hitting the market, and plenty of sales happening in return. This year should see just that, with prices coming in line with predications within the next few months, and even yielding a slight year-over-year rise by the end of 2018.
The instability in the last few months has come from a combination of factors including January’s implementation of new laws, last year’s foreign buyer’s tax, rising interest rates, and market deflation, all which had a cumulative effect on housing prices starting in January. Add to that the struggle for first time home buyers, in many cases eliminating them as a potential house-purchasing candidate, and the market did indeed start off slowly in the 2018 season.
But there is no lack of houses on the market to meet the demand, and while experts acknowledge macroeconomic factors, such as mega-projects and immigration “weigh heavily” on the housing industry, they still predict things will start to heat up for spring, and that pretty soon, the housing trends will be back on trend!