Is real estate in The GTA Cooling?
Monday Dec 13th, 2021
The housing market in the GTA has been fast-changing in the last couple of years, and the pandemic has contributed to the unpredictability in the market. So the big question is, will the real estate market be cooling down? Keep reading to find out.
What's a Cool Down?
A cool down is most likely when there isn't any purchase in the real estate market. Now seeing the conditions of the GTA, it's observed that the absorption rate of various properties was below a month's inventory. This shows that it's an extreme seller's market in GTA. For instance, if any property sells for $1 Million, then there is a possibility that another property might get listed the very next week and get sold for more. When a market cools off, properties are sold for higher than the previous property. With the pandemic, the market has become very unpredictable in the GTA.
Factors to Consider in GTA Market Cool Off
The Bank of Canada announced short-term low-interest rates, which means more people are leaning towards purchasing right now. You can easily cause this sudden developing interest because of the low mortgage interest, so people may end up paying pretty low rates compared to pre-pandemic rates; that's a steal! According to a few research surveys conducted, most Canadians want to become homeowners, and what better opportunity than to invest in the GTA?
Are Any Signs of a Cool-down in the Upcoming Future?
Spring is the busiest season in the GTA housing market. Traditionally the supply and demand both increase significantly. It's expected that there might be an increase in the inventory while demand will remain constant; this will result in the cooling down of prices.
What to do?
It's predicted that there might be chances of a cooling market happening shortly in GTA. But this certainly doesn't mean property prices will go down to a great extent. From an extreme seller's market, it may move above towards something more balanced as to what it is now. The rise in interest rates will result from the economy opening up and may put a strain on the housing market in GTA.
As soon as the economy opens up, it’s predicted that potential buyers may want to invest their money elsewhere, vacations, restaurants, and even on their usage, which may reduce the demand for housing in the GTA.
Condos and all those freehold properties at the entry-level will do well as various buyers will be forced to loosen up their budgets if they want to make a purchase. It’s expected that the suburbs will be subject to a substantial hit because the people will start realizing that it’s not ideal for driving two hours every day to and from work and home. As a result, there won’t be any feasibility and hence steaming the rental market.
What does this mean for you?
It depends on your goals. As an equity master, my job is to help you know what to do, how to reach your goals, when to do it and how all these decisions ultimately increase your equity. Fluctuations in the market can be scary, and sometimes people make mistakes out of fear. My expertise allows me to predict when and how to make the right moves. So if you’d like to make a plan, book a free consultation with me and let me help you get what you want, and more.