Industry leaders are cautioning agents working Toronto’s west end, warning them about a seemingly ideal client intent on luring them to vacant properties.
Four months after having its hand slapped by TREB, this online brokerage is closing its doors.
I should say beforehand, that I'm not an economist, but I do have an opinion. . .- Interest rates are a vital factor in the equation of real estate, as well as are employment and inflation. - Interest rates have an effect on the value of our currency and therefore on import and export of our goods http://www.statcan.gc.ca/start-debut-eng.html.- Interest rates are always under the microscope of local or foreign investors.- Let's say that two years ago, the Canadian Dollar was almost at par with the US Dollar; nowadays we as Canadians pay 32% premium on the exchange for US Dollars, it means that we lost 32% value on all our assets (home value, RRSP's, savings, and all sort of investments in Canadian Dollars) including our income. - We accept paying more for everything (local or imported), but according to the government, the inflation rate is below two percent and well under control.- What is going to happen next in real estate ?- I have noticed, as you probably did, that last year in GTA we had a multiple offer situation in almost every real estate transaction; well the second part of this year we do not have the needed inventory and neither the number of purchasers. - I also believe that new government regulations, changed something in the lenders' mind making them more exigent and demanding; the current lack of inventory will put a brake on our yet active real estate market, when this happens, a great sector or our economy will too, slow down. As per the Toronto MLS Historic Residential Data, taking the month of July '12, I noticed that "Sales / Active Listings" had a ratio of 36.11% this past month of July '16 "Sales / Active Listings" had a ratio of 87.8% furthermore, the calculated ratio of Sales / New Listings for the month of July '12, was 53.2% and Sales / New Listings for July '16 was 73.8% . Now while in July '12 we had 13,796 new listings inJuly '16 the New Listings were only 13,490- The would-be sellers, in the real estate market, know they could get a good buck for their property but also feel there is not inventory and do not want to risk their stability in an uncertain gamble of becoming purchasers.- It is understood that the higher price of the houses is also in play and limit the buyer's ability and qualification for a mortgage.- We all agree, borrowing money must have a cost, but I do not think that interest rates have to be un-affordable in a way that it pushes people to borrow money on the black market.- All of the above is indicating me that the real estate market is already up to a level where it will stay like that until real employment growth happens until our currency gets back its strength and stops depending on oil prices, and interest rates remain still affordable.
10 years ago interest rates were hovering around 5% and people were not freaked out by that, considering at the time, the rate was considered decent. Houses were still selling quickly here in Toronto and often in multiple offers. Nowadays with historically low interest rates, people are worried if those rates climb when it comes to buying a home. The feeding frenzy all started with those interest rates getting lower and lower over the last decade. This is part of the problem as to where we are today. Why didn't we stop lowering those rates when our real estate market was already on fire and the prices were already accelerating, instead they were lowered to a point that prices have gone through the roof and now those same purchasers may be in hot water if those rates start to rise after their fixed rate term (.e./5 years) is over.
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