Housing affordability and supply issues may affect Canadian homebuyers and sellers directly, but they may also have indirect effects on the real estate market and the overall economy. The contribution of the contribution of the Real Estate, Rental, and Leasing (RERL) industry to Canada’s Gross Domestic Product (GDP) has increased significantly over the past twenty years, using up to 5% of GDP dollars currently coming through RERL in other regions, according to Statistics Canada. With 13.5%, RERL contributes the most to the national economy of Canada.
The rising cost of living, a growing population demand, unemployment, the mortgage stress test, and housing diversity in relation to “the missing middle” are all expected to have an effect on the Toronto real estate market. Rental prices are also rising to record levels as the increased cost of living limits first-time homeowners’ ability to purchase.
Canada is enthusiastically welcoming record numbers of newly arrived people in terms of immigration. However, unless more homes are available, the market is expected to increase both rental and sales prices.
Canadian homebuyers and sellers are optimistic that 2023 will usher in a more balanced market. Despite the nation’s fragile economic environment, as per RE/MAX Canada’s 2023 Industry Trends Report. The research looks at the main economic and transactional trends that will probably have an effect on Canadian homebuyers, sellers, and the larger real estate market this year.
Considering the consequences for consumers, real estate companies, and the real estate industry that go beyond transactional implications, it is likely that other businesses will be impacted by the difficulties in Canada’s housing market.
The ability of employers and businesses to recruit new employees—who might have trouble finding housing—as well as the capacity of local communities to draw in and keep new businesses to support economic growth, may all be impacted by rising office rental costs, a lack of available space, and other factors.
Other Important Trends:
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In the GTA, location is anticipated to continue to be a major demand factor. Premium areas like the downtown core and the area around Yonge and Bloor are unlikely to see substantial price and demand drops.
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Demand is more likely to decline in places/cities that do not offer a variety of liveability (access to transportation, green space, walkability, availability of restaurants/shopping, etc.).
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Rising interest rates have resulted in a much-needed price adjustment in the Greater Toronto Area, which has benefited many move-up and investment buyers, especially those who are relocating from urban centres to nearby communities like Markham, Richmond Hill, Pickering, and Ajax.
3 Pieces of Advice for Toronto Real Estate Buyers:
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Less competition does not imply a lesser or uncertified deposit; a solid, certified deposit is still crucial to show the quality of a homebuyer’s offer and that they have the resources to finish the sale.
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A mortgage commitment and inspection should be completed prior to the offer in order to be able to put your best foot forward in any competition and market conditions. Homes in the majority of market areas of the GTA that are priced correctly will continue to generate multiple offers.
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Being accessible to present an offer in person to an agent is always a smart move. Sellers will notice the difference, and it frequently gives the home buyer an advantage to move with the Realtor more quickly than the competition to win the deal!
Three suggestions for selling a home in the Toronto Housing Market:
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There will likely be less competition and economic headwinds in the second half of 2023, and the first half of the year will probably provide sellers with more favourable conditions in the Toronto housing market.
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As a seller, it’s crucial to concentrate on the value gap between the property being sold and the one being bought; there are many opportunities to “move up” when switching between markets and properties (for example, moving from a condo in Downtown Toronto to a detached house in Hamilton).
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Lastly, staging homes continues to be a best practice with a big impact in all markets.
Takeaways:
The Toronto housing market has long passed from the era of expansion. While the market will eventually calm down, it is obvious that rates will rise dramatically as the economy recovers and rebounds as the trend of property inflation continues. Being aware of (and ready for) these anticipated market shifts is crucial, whether you’re an existing homeowner or looking to buy your first house.
Do your studies to ensure you’re set up to weather the storm of increasing rates and how they’ll influence your present monthly mortgage payments. Take a long, hard look at your 2023 budget so you can focus on conserving money and paying off as much debt as you can in the meanwhile.
