The Toronto Real Estate Market Now: Buyers vs. Sellers

For the last couple of years, the Toronto real estate market has been at the forefront of conversations to most Torontonians. Average detached home prices topped over the $1 million back in 2015, and reached almost $1.4 million in 2017, and in a city where rental rates are also reaching unattainable heights, housing is a major issue. 

Shift to the present day, just a few months after the city’s all time real estate highs, and the conversation has begun to change. The cooling efforts introduced by the municipal government kept everyone on their heels for most of the spring market, where a record number of homes went up for sale after months and months of a drought of new listings. Add in the first rate hike by the Bank of Canada in the last 7 years, and the market as a whole is perched on the edge of a major change. But depending on your viewpoint, whether your a potential seller who wants (or needs) to sell in the near future, or a prospective buyer with a down payment burning a hole in your pocket, this new frontier poses some challenges, and opportunities.

Buyers

In the event of a market downturn, or a “soft landing” as many realtors have been predicting, the current forecast should be calling for a buyer’s market. But while buyers might be getting into the driver’s seat, sellers are not quite ready to give up the idea of a big gain on their home sale. Tim Syrianos, President of the Toronto Real Estate Board's (TREB) Board of Director noted in the most recent TREB Market Watch report that "On one hand, consumer survey results tell us many households are very interested in purchasing a home in the near future, but some of these would-be buyers seem to be temporarily on the sidelines waiting to see the real impact of the Ontario Fair Housing Plan.On the other hand, we have existing home owners who are listing their home because they feel price growth may have peaked. The end result has been a better supplied market and a moderating annual pace of price growth”. So while buyers are watching a waiting for their time to pounce, sellers are also playing a waiting game. So what’s your best option if you’re waiting to break into the market? Make sure all your financial affairs are in order, and be prepared for a longer wait. With an increase in interest rates, even small increases, you need to know exactly what you can afford, and what kind of rate your bank will give you. Banks will usually lock in pre approved mortgage rates for at least 60 days, and can be renewed when you re-verify or change supporting documents, so having that in hand will help you make an attractive, unconditional offer when the right property, and price comes along.

Sellers

At this point it’s fair to say that the days of widespread bidding wars are coming to an end, and that isn’t necessarily a bad thing. The pace of the Toronto real estate market had exhausted buyers, and a new, more balanced market is a good thing for buyers and sellers. However, the sky-high prices that were rolling in just a few months ago have peaked, and as a seller, you’ll have to work with an established real estate agent to discuss realistic pricing strategies for your home. This doesn’t mean that you’ll have to suffer a loss on your home, prices are still up over 10% from last year on detached homes, and more than 23% on condos. Listings, though higher than last year, are still in line with seasonal adjustments, and the approaching fall market is another big time to consider listing your property for sale. As the market continues to find it’s footing, it’s more important than ever to have your home prepared for sale, and that means big clean outs, home staging, and having good representation.