Long considered as one of Canada’s leading hubs for housing activity and price growth, Toronto is now entering a stage where things become more uncertain for the residential real estate market, according to a CMHC analyst.
“I think we’re at a critical time in terms of the market and hard to tell where exactly it’s going to turn,” CMHC’s GTA principal of market analysis Dana Senagama said, as quoted by CBC News.
“But I do think things will start to slow beginning in 2018,” Senagama added.
The analyst argued that the city’s long-running affordability issues will scare off more and more prospective buyers. Coupled with higher borrowing costs and tighter federal mortgage rules, the Toronto market is expected to experience a noticeable cooling within the next few quarters, Senagama stated.
Also, the completion of approximately 69,000 units currently under construction in the GTA would augment the region’s supply—thus contributing to a gradual decline in demand.
However, the Ontario Real Estate Association cautioned that the market shouldn’t expect these new homes to be move-in-ready right away, and that even the supply improvements won’t be enough to accommodate the demand.
“I'm happy to see CMHC numbers show more housing coming to the marketplace,” OREA CEO Tim Hudak said. “In the city of Toronto, we have less than 1,000 detached homes for sale, and you have a lot of people who want those homes so you get these huge bidding wars.”
In its latest predictions, TD Economics forecast home price growth rates to “cool” to between 3 and 5 per cent by next year—a much more sedate pace compared to the 20 to 25 per cent projected for 2017.
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