48 Days and Counting

  • Wilson Sisters
  • 13 November 2017

It's been a bit of a strange six months in Toronto real estate. After a very intense spring that saw sellers walking with unheard of prices for their homes, the intervention by the government has served its purpose and a cooling of prices has been seen in freehold properties here in Toronto. We were starting to see things heating up again after the dust settled on the introduction of a foreign buyer tax in April until the latest stress test announcement came down on October. As of December 31, 2017, all buyers of residential properties will have to qualify at a higher rate, which will decrease their buying power by approximately 18%. The goal in the long run is to ensure that, as interest rates rise, homeowners can still afford their mortgages. No one knows for sure how much of an impact this will have on sales in the new year, as, according to most mortgage brokers we've spoken to, at least 85% of buyers typically do not purchase to the top of their approved amount anyway. However, we expect that the uncertainty will cause a pause or a general cautiousness amoung buyers early in 2018, based on earlier buyer behavior after policy changes. 

Some areas have been hit more than others since April when the announcement of the foreign buyer tax was made, with York Region, an area that was popular with foreign investors, seeing the most value reduction. There are segments of the market though that are not only holding their value, but seeing strong gains. The condominium apartment and townhouse market are booming, a result we think, of buyers being forced, or deciding to purchase at a lower price point. Multiple offers are rampant. We just sold a loft in Queen West for $1030 psf, which is pretty close to Yorkville and Bay Street corridor pricing, and have seen condo properties with as many as 27 offers on them during the last month. As one might expect, there is a frenzy amoung buyers and sellers to get their real estate business wrapped up before December 31, and the amount of calls this fall we've had from past clients and the public about whether they should be doing the same is not insignificant. 

Should you be rushing to get your property sold during the next 48 days? Maybe so. If you are motivated and can move quickly, we would suggest you get it done. Otherwise, if you're going to wait, it's our belief that you should sit tight during January and see what happens. Stay in close touch with your professionals and keep your finger on the pulse. If buyers are still coming out and no one is listing, it may be that late January or early February will still be okay, but overall, we are expecting a much quieter spring than we saw this year. 

No matter what, there are always people looking to buy and sell in Toronto, and if our market does return to some balance, rather than being so heavily weighted to sellers, it will be healthier in the long run. Just make sure you hire someone who can put you in the strongest position possible, through effective marketing and staging and presentation of your property. It will be more important than ever.