Real Estate Market Update - September 2024
The real estate market in the Greater Toronto Area is finally showing signs of rebounding. After months of declining sales activity and stagnant prices, September saw an increase in average prices and number of sales across most GTA markets. The most notable changes are in the City of Toronto, where average days on market have even decreased by 10.6%. These positive changes are due to more buyers taking advantage of the current market conditions. With the recent interest rate cuts and lower average prices compared to earlier this year, buyers are seeing clear advantages of getting into the market now. Not only are sales up month-over-month, but sales are also up 8.5% compared to last year. However, new listings continue to stay elevated, up 10.5% year-over-year. The high levels of inventory across the GTA is the reason why prices haven't jumped in recent months. Depending on home type and location, prices have remained mostly stable or have increased slightly in some cases. On average, prices are down only 1% compared to last year. With every future rate cut, a growing number of people will be able to afford home ownership. As a result, demand is expected to rise in the near future which will put more upwards pressure on pricing. Reach out to me to learn how these recent changes affect your situation. To see how prices have been affected in your area, please click the link below to get access to TRREB's September Market Statistics for all areas in the GTA. The stats are broken down by average sales price, number of homes sold, number of new listings, and average days on market for each property type; detached, semi-detached, townhouses, and condos. https://trreb.ca/wp-content/files/market-stats/market-watch/mw2409.pdf If you want to know more about what is happening in your specific area, you can book a call with me by clicking the link below. https://calendly.com/davidrizzuto/consultation-call?month=2024-10
Big Mortgage Changes: What's New?
Canadians will soon benefit from a variety of mortgage changes that are aimed toward making housing more affordable. Last month the federal government announced significant updates to Canada's mortgage rules, which will take effect on December 15, 2024. One of the biggest changes made is the new price cap for insured mortgages. The limit has been raised from $1 million to $1.5 million, allowing buyers to put less than 20% down for properties up to $1.5 million, by way of an insured mortgage. A minimum 5% down payment is needed for the portion of the purchase price up to $500,000, and at least 10% for the portion between $500,000 and $1.5 million. This will help many more buyers in urban areas like Toronto where home prices often exceed $1 million. In theory, buyers will be able to purchase a $1.5 million home with just a $125,000 down payment. Another considerable change is the expansion from a maximum 25 year amortized mortgage to 30 years for more home buyers. The 30 year option is now available for first time home buyers with insured mortgages (i.e. under 20% down payment). Any buyer purchasing a newly built home can now have a 30 year amortized mortgage as well, which was changed in an effort to help pickup slowing new home sales. The goal of this change is to make home ownership more attainable by lowering monthly payments, and in turn, extending amortization periods. The requirement to qualify under the mortgage stress test for a mortgage renewal has now been eliminated. The stress test was introduced in 2018 and was designed to make sure homeowners can afford their mortgage payments if rates increase. It requires borrowers to be approved for a rate 2% higher than the lender's rate or 5.25%, whichever is higher. The stress test is still a requirement for new mortgages, but has been scrapped for any mortgage renewals even if the borrower is switching lenders. On top of these major changes, the interest rate has dropped again on October 23rd by 0.5%. This is the largest rate reduction since 2020. The Bank of Canada's key rate is now 3.75%, with the prime rate now sitting at 5.95%. It is clear that the efforts from the Canadian government and the Bank of Canada are meant to stimulate our sluggish real estate market, and the economy as a whole. With inflation on its way down, the Bank of Canada is prepared to make further cuts to the interest rate if current trends continue. If you have questions about these recent changes, or want to know how you will be affected, reach out to me.
Real Estate Market Update - July 2024
The Greater Toronto Area real estate market continues to tread through the summer market, with sales and average prices edging lower compared to last month. The number of sales continue to decline across all GTA markets while new listings continue to climb. As a result, buyers have been benefiting from more choice and greater negotiating power in this summer market. In certain aspects, the real estate market has started showing signs of bouncing back. On a year-over-year basis, sales are up 3.3%. The uptick in July sales compared to last year is likely thanks to the last two interest rate cuts. More buyers have begun to re-enter the market after seeing a total 0.5% reduction in interest rates since June. However, experts predict that more rate reductions will be needed in order to see a more significant and lasting change in the real estate market. Due to the currently high supply of listings, average prices are 0.9% lower compared to the same time last year. On a month-over-month basis, average prices are also down slightly across the GTA. New listings are up 18.5% - a substantial difference compared to last year. More available inventory has also caused the average days on market to climb. Average days on market in the 905 now sit between 30 to 60 days, with the average in Toronto being 37 days. Reach out to me to see how you can benefit from the current market conditions, or plan ahead to reach your real estate goals! To see how prices have been affected in your area, please click the link below to get access to TRREB's July Market Statistics for all areas in the GTA. The stats are broken down by average sales price, number of homes sold, number of new listings, and average days on market for each property type; detached, semi-detached, townhouses, and condos. https://trreb.ca/wp-content/files/market-stats/market-watch/mw2407.pdf If you want to know more about what is happening in your specific area, you can book a call with me by clicking the link below. https://calendly.com/davidrizzuto/consultation-call?month=2024-08
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