A few weeks ago it was announced that October saw a solid rise in condo purchases, most falling in mississauga and richmond hill. Land getting more expensive, condo units get smaller. The smaller units have to attract end users by offering up good amenities and clever sleek designs. Apparently, we have an appetite for low rates still and don't mind living in close quarters to get out of our parents basements and build equity. I thinks that's a good move.
Other data saw September's TO market drop almost 2% in prices. Of course, this should be further identified by looking into specific areas as trendy blocks with little supply are hitting homeruns on sales prices.
Now, if the world is playing games with currency interventions to keep their exports fuelled and say buying up CDN dollars serving to strengthen the loonie while at home inflation remains beneath the target rate...basically you get a Cdn economy losing its power with a high currency as an exporter while still tempting home buyers into the market with low rates. When these rates go up the arguement is that is when the "bubble bursts". It's not imminent from what I understand. But that seems to be where were at.
Currency intervention by developed countries; low domestic rates; an appetite to own homes and a strong loonie create a challenging landscape. At least we're not choking off growth and playing austerity games that will almost undeniably slow growth elsewhere.
The biggest concern by most economists around housing is the sheer level of indebtness that personal households are holding and the future of employment.
The market for homes in TO is getting closer to balanced but prices albeit some small drops of late still take us above pre recession levels by about 3% (National Post source).
So its not cheap out there. There are good opportunities though and for those who are prudent....get in the market and leverage these low rates. Just don't blow your brains out!!
Michael Gruenstein MBA CSC
mgruenstein@trebnet.com
Re/Max Realtron Realty
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