The Weir Team shares the latest Toronto and Durham Region real estate forecast from the Toronto Real Estate Board.
The summary is below:
Greater Toronto Area (GTA) households continue to see home ownership as an affordable, quality, long-term investment as evidenced by the record home sales reported through TREB’s MLS® System in 2015. Both low-rise and condominium apartment prices increased on a year-over-year basis, as measured by the MLS® Home Price Index and the average selling price. Seller’s market conditions resulted in high single-digit or low double-digit annual rates of price growth for low-rise homes throughout 2015. The better supplied condominium apartment market experienced more moderate single-digit annual price increases, but price growth in this market segment still outpaced inflation. A healthy regional economy along with historically low borrowing costs spurred demand for ownership housing in 2015. The majority of recent home buyers took advantage of competitive lending market conditions to receive substantial discounts off posted rates. A very small percentage of recent home buyers put down between 5 and 9.9 per cent toward the purchase of their new home. Finally, the economy benefited from the rise in transactions, which stimulated an additional $5.5 billion in spending.
2016: HOME SALES WILL REMAIN STRONG Home ownership demand will remain strong in 2016, with TREB MLS® home sales amounting to between 96,500 and 105,000, depending on the direction of borrowing costs and the availability of listings. A relatively strong GTA economy will keep the unemployment rate low and result in moderate income growth. Even if borrowing costs increase alongside stricter lending guidelines, pent-up demand carried over from 2015, especially for lowrise home types, will ensure that many willing buyers remain in the marketplace. We will continue to experience seller’s market conditions in 2016, but despite the tight market, price growth will be mitigated to a certain degree by the lending preapproval process and federal lending guidelines. The average selling price will range between $655,000 and $665,000.
IMPROVED INFRASTRUCTURE THE KEY TO GGH LIVEABILITY AND COMPETITIVENESS The Greater Golden Horseshoe (GGH), which includes the GTA, is internationally recognized as a great place to live, work and play, and many see purchasing real estate in the GGH region as a wise long-term investment. While the region and the municipalities that comprise it are seen as an attractive place to reside, the stakeholders consulted for this report noted that work must be done to ensure the GGH remains a competitive global region. Improvements to our transportation system and public infrastructure, as Executive Summary 2015: A RECORD YEAR FOR HOME SALES Executive Summary TREB Market Year in Review & Outlook Report – January 2016 XII well as increasing the affordability and availability of housing options, will optimize the GGH’s long-term potential and increase the region’s liveability. In order to ensure that necessary improvements proceed in the most efficient, cost-effective and successful manner possible, it will be vital for all levels of government and all stakeholders involved in the process to coordinate their approach.
NEW HOME CONSTRUCTION DOMINATED BY HIGH-RISE DEVELOPMENTS The number of new homes sold in 2015 remained within the long term normal range for the past decade and in line with net population growth. However, a marked decadelong shift in the types of homes being built continued, with the majority of new home sales accounted for by high-rise developments last year. In contrast, ten years ago, lowrise home types accounted for the majority of new homes sold. In 2005, the provincial government introduced policies (the Greenbelt Act and the Places to Grow Act) intended to protect significant agricultural land and green space while shaping how and where our region grows. The building industry responded by constructing more high-rise condominium apartments. However, the demand for new low-rise home types has remained very strong, which has pushed new home prices to new heights. A recent survey conducted by Ipsos for the Building Industry and Land Development Association (BILD) found that 39 per cent of residents in the GTA are very concerned about home ownership affordability
For the complete report, go here.