After months of uncertainty, the Greater Toronto Area real estate market is officially in post-correction recovery, according to REMAX INTEGRA.
“There’s a ripple and it’s having an effect on move-up and even luxury buyers,” said REMAX INTEGRA’s Christopher Alexander, vice president and regional director for Ontario-Atlantic Region.
That ripple—and, by extension, recovery—is thanks to first-time buyers. Mainly active in the 416, first-time buyers preponderantly purchased homes between $600,000 and $900,000. In fact, since June, there was a 22% year-over-year sales increase in that segment.
“It seems like they reappeared in mid-to-late June,” said Alexander. “That’s when things started picking up and year-over-year price increases started to happen again. The market seems to be in a really good place right now and we think that we’re going to finish the year strong and have moderate to healthy appreciation in 2019 of 2-5%.”
Demand for detached homes, according to REMAX INTEGRA, is beginning to surge as well, and that’s reflected in their pricing. But first-time buyers can largely be found in the city’s condominium market.
“They’re getting help from mom and dad, who built a lot of equity in their homes,” continued Alexander. “Most of them are children of baby boomers, which is the wealthiest generation in history. They’re out there assisting their kids to buy, or their kids are buying with friends or getting married and pooling their resources together. The easy way to say it is first-timers are getting creative and spent a year saving up to meet all the requirements.”
To say that first-time buyers are back might be a bit of an understatement, given the leverage Toronto’s condo sellers wield these days.
“There are multiple offers on condos in Toronto—it’s a real grinder there,” said Rosie Gimeno, a sales representative with REMAX Specialists Estate Group. “People in Toronto have to be more aggressive and they’re cutting conditions. It’s very much back to the market that we were.”
Gimeno stresses that she advises clients against waiving their conditions, though.
“I always want to keep the condition of finance in there so that we can keep the underwriters on the same page because it’s been extra scrupulous with qualification,” she said. “I think it’s important for first-time buyers to get all their ducks in a row.”