Earlier this week, I heard a great comment from one of our sales representatives: In the future, when we look back on today, we’ll be saying one of two things. “Man, am I ever happy I bought that,” or “Wow, I really should have bought that.”
This is not a bold prediction. We know it’s going to happen because we’ve been here many times before. The tech bubble, the financial crisis, the municipal land transfer tax, the mortgage stress test, the foreign buyer tax, the foreign buyer ban…yet through it all, like déjà vu, we keep returning to the same place. Deep down, I think we all know that in time, we will be having a conversation about how demand has returned to the market, there is a shortage of housing inventory, and prices are on the rise.
When will we be having that conversation? Tomorrow, three months from now, next year? None of us have a crystal ball, but let’s look at the facts. The Bank of Canada has announced a third straight rate cut, and at least one leading economist predicts a lending rate below 4% by year’s end. 2.8 million immigrants have come to Canada over the past three years, the bulk of which have come to the Greater Toronto Area. And the foreign buyer ban continues to have a negative effect on the pre-sale phase of new condominiums, effectively delaying housing starts and stunting future inventory. In fact, Altus recently published data stating new condo sales in the first half of 2024 were down 57% from last year and 72% below the 10-year average. What will happen when the demand returns and builders haven’t been building? Prices will go through the roof.
Today’s buyer is in an advantageous position. There is inventory. There is less competition for the available product. Selling prices have been coming down, most notably in condos, towns and semis. Buyers are in a better position to negotiate on price and terms than they have been in ages. But windows don’t stay open indefinitely. This market will not last, just as the seller’s market of 2021 didn’t last.
As always, if you are in the market to purchase or sell a home, I would encourage you to speak with myself or a member of the sales team. We have been in business since 1957 and can expertly guide you through any real estate market environment.