Market's Still Too HOT for First Timers
Analyst sees price growth slowing down....eventually
Growth in house prices is expected to "flatline" in Toronto in the coming months, but first-timer home Buyers may still find themselves priced out of the market.
"If you were thinking about buying next year, your're more likely looking at town years down the road," said Dana Sanagama, a market analyst with the Canada Mortgage & Housing Corporation.
The CMHC released its forecast for 2016-2017 which highlights real estate trends across the country.
In the GTA, a combination of surplus stock & lack of affordability should put a stop to "unsustainable" price growth. In a nutshell, a lot of these indicators are going to slow down over the next couple of years. That's not necessarily a bad thing, it's the market adjusting to imbalances that we've seen over the past 12 months.
That doesn't mean prices are going to go down, it means that they won't increase as fast.
As a result rental vacancy rates in the city will remain low, as prospective Buyers hold out for something better.
There's still very strong rental demand. Why is that? It's simply because it's less & less attractive for first-time Buyers to enter into home ownership.
Unfortunately, CMHC expects mortgage rates may start to rise by the end of 2016, meaning even if prices do drop, the actual cost of the home may remain the same.
Those still looking to buy in the next year may need to adjust their expectations. You still have choices. It's just about where you compromise.
Maybe you were thinking about a townhouse, but that's out of your price range, so you buy a condo. And maybe that condo isn't in downtown Toronto, but out perhaps in North York. Any young Buyers set on a single detached home will likely have to look as far out as Whitby & Markham.
Buying a single detached house in the city of Toronto is not really at the level of the first time Buyers - you're looking at millions of dollars.
Source: MetroNews - Housing -Luke Simcoe Nov 2015
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