With 21 plus years experience and being a student of real estate, I am often asked my opinion of current markets. More now than ever, it has become difficult to make sense of the current market and give a solid analysis of where the market is headed.
These are very unusual times with no real understanding of what the new norm will look like for families.
What we do know is a home is a safe and secure place; to bring family together, to work and support ones dreams. A home offers a sense of pride and a commitment to whatever future you and your family aspire to live into.
So Now What?
So what more do we know now that the budget has been announced? The central bank has not put in place strict measures to cool the residential real estate market and consumers' mighty appetite to own a home in this province. There was much noise from journalists/bankers/economists over the past few weeks and many effective measures- especially to cool speculation- could have been implemented. There were rumblings about land transfer taxes increasing in the 905 area and of capital gains on personal residences.
Instead, new mortgage stress tests will be introduced as of June 1st, 2021. Borrowers in this group will have to prove they can afford an interest rate of 5.25%, up from 4.79%. Real estate is a trickle up business and tougher mortgage qualifications will remove approximately 5% of first time buyers out of the market. A 1% vacancy tax has been added in the GTA as well.
The only scenario that could cool the market quickly would be a hike in interest rates and a swell of supply. With the arrival of more vaccines, we are starting to see an increase in supply as baby boomers who had delayed their plans to move are now eager to list and start a new chapter.
The number of unit sales increased significantly this March over last year we were just in the beginning of the pandemic. March to July is typically the peak selling time for residential real estate and we are now entering the peak of our market. Buyers are waiting for more inventory to arrive on the market and are lining up to bid. Great market conditions for Sellers as the number of months of inventory are at an all time low.
So, for now it’s business as Pandemic usual ... very little inventory - less now than back in March 2020. What does this mean? Handsome returns for most sellers. Buyers fighting for the home of their dreams.
It is my advice for all potential Sellers and Buyers to block the time needed to consult a professional realtor that can interpret the current real estate market and provide a plan that can help you and your family. Selling or buying real estate is a big deal.
You can reach me with any comments or questions.
905 278-7355 | [email protected]
Stay Safe. Kevin