January 2019 Market Intelligence

As you can see just by the headlines there are many conflicting articles about what the real estate market is going to do this year. These articles come out in January every single year and usually the very same people are interviewed for their opinions every year, regardless of if they have ever been correct. Lots of noise, hard to know what to believe. 

Everyone has an opinion, so here is my opinion: 
At the moment the Bank of Canada has slowed their campaign of raising interest rates from their torrid pace of increases (the turquoise highlights on the graph below indicates each rate increase) that we have recently endured. Their decision is heavily tied to the price of oil decreasing sharply and the GDP numbers coming in lower than expected. While 2.5% -3% remains the goal of the BOC they are not willing to raise the rates until they see the GDP increasing to acceptable levels and much of that has to do with the price of oil and they also stated today that they will be keeping a very close eye on the real estate market as they are worried that the combination of rising rates and the tightening of mortgage qualification rules (the stress test) might stem the tide of demand too much. I don’t expect another rate increase until the spring, so if you are thinking of buying in the spring it might be a good idea to get pre-approved before the spring, like in February or March as the pre-approvals are typically good for 120 days.

The demand for real estate in the GTA has been incredibly resilient over the last 18 months spurred in large part by an approximate 100,000 people moving to the GTA from not only different countries but also different provinces and cities. These people are coming with down payments and jobs. In addition to the immigration, there is now an additional 50,000 young people who have been living with their parents that have now saved up enough of a down payment (many times with the help of the bank of mom and dad) to finally enter the market as buyers. 

While I hope that this resiliency will continue through 2019, I don’t have a crystal ball – nobody does. My best advice continues to be that if a person has a good enough reason (only you will know what’s a good reason to you) to move it can be a great decision in any market condition if navigated correctly. Whether the market is up or down it’s the same for buyers as it is for sellers. If you sell high in an up market you will most likely buy high as well and vice versa. If you have a solid motivation to make a move contact me any time as I am always happy to chat. 905-399-4269.

Here are the market numbers since March 2017 until December 2018. We saw a big decline in volume but a sharp increase in price. Because of the decrease in volume our month’s supply increased in December