02 Nov 2021

Episode 87: Buyers to face more intense competition as new listings pullback in all communities

Hello and good morning to all – everything is lining up to close out the year very much in favour of Toronto’s Sellers.

As restrictions eased, this was not a tricky trend to spot, and humans started roaming around more freely. It was inevitable. But that’s not even the conversation anymore. In Toronto, we have a lot of intelligent people…so the majority of us are fully vaccinated.

Most businesses are back to normal. Although some government assistance programs have expired or are getting ready to expire, many are incredibly comfortable in their jobs and are making moves.

But let’s address the elephant in the room.

Interest rates

Benjamin Tal, who’s generally quite optimistic about the Toronto Real Estate market, had a lot to say in this Bloomberg article.

During the meat of Covid and up until a few months ago, the Bank of Canada had stated that they didn’t want to touch interest rates until 2023.

That conversation may change a little now that the economy is in recovery mode. The think tanks are trying to determine the impact of increased interest rates right now.

There could be 6 to 8 incremental rate increases during 2022.

What does that mean to you? Not much if you got your mortgage 2017/18 and need to renew soon as rates were higher then. Also important to remember that if we get this 1-2% increase in rates by mid-2022, that still doesn’t take us beyond the rate at which you were approved using our protective stress tests.

So overall, increased interest rates could affect some Canadian markets. Still, in a high-demand market like Toronto, it’s going to take a lot more than a couple hundred extra dollars per month on a mortgage payment to change things.

Those that are considering stretching to their max should take a hard look at their finances, though. As the article says, if you don’t have much savings and are considering maxing out on a home purchase, you should consider leaving a bit of a buffer.

Perhaps this move could temporarily take some heat out of the entry-level luxury markets until Buyers learn what’s going to happen out there. Still, long term…regardless of what happens in the short term, you’re going to have a better retirement if you own real estate. This is indisputable.

Urban Markets: Downtown & Surrounding Areas

House Average Price: $1,713,440
House Median Price: $1,490,000
395 Active Listings
114 Firm Sales This Week
Months of Inventory (MoI) ~ 1.15
Average Days on Market ~ 14.68 DoM

Condo Average Price: $843,401
Condo Median Price: $728,888
1390 Active Listings
186 Firm Sales This Week
MoI ~ 1.48
Average Days on Market (DOM) ~ 15.05

Urban North: Rosedale, Deer Park, Moore Park, Forest Hill, & Lawrence Park

House Average Price: $3,900,702
House Median Price: $2,625,009
104 Active Listings
20 Firm Sales This Week
Months of Inventory (MoI) ~ 1.68

Condo Average Price: $1,386,499
Condo Median Price: $1,091,500
236 Active Listings
16 Firm Sales This Week
MoI ~ 2.97

Leaside, Davisville, Yonge & Eglinton

House Average Price: $2,929,714
House Median Price: $1,770,000
35 Active Listings
7 Firm Sales This Week
Months of Inventory (MoI) ~ 0.70

Condo Average Price: $812,871
Condo Median Price: $800,000
109 Active Listings
17 Firm Sales This Week
MoI ~ 1.67

Birch Cliff

House Average Price: $1,363,750
House Median Price: $1,258,000
14 Active Listings
4 Firm Sales This Week
Months of Inventory (MoI) ~ 0.44

Thanks so much for your energy and attention! If you need clarity on any of this or want to talk about your specific situation, then call/text/email anytime: ara@thespringteam.ca or 416-434-1511

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