Toronto Real Estate Market – An Overview
The Toronto real estate market, much like Canadian winters, can feel like a harsh environment to navigate for the average Joe. With tougher federal mortgage laws introduced in January 2018; many homeowners have literally been priced out of the market, and existing owners have found their property values sticking in neutral or falling with an average loss of 4 percent.
With property no longer feeling like a guaranteed investment, we take a look at what has been happening in the Toronto real estate market to lead to this downward trend and how is the wheel of fortune likely to turn over the next 12 months?
In recent years property prices have risen exponentially across the GTA, and although this has been a delight for many sellers, it has been a double-edged sword in that fewer people have been able to afford to get onto the property ladder. Those who did buy when the price was high then found their mood falling along with the inevitable decline in market prices as well as those who presumed their home was a stable investment for the future that would only keep increasing in value. There are those of course who are now hoping for a crash to put a definite end to what has felt for many inhabitants as Toronto's housing affordability crisis, but it is more likely that the market will continue to stabilize with a few bumps along the way during 2019.
New federal mortgage laws
In line with the country intentions to limit the amount of debt that the population and financial institutions took on; new federal mortgage laws introduced on the 1st January 2018 meant that Canadians getting, renewing or refinancing a mortgage could find themselves having to complete a "stress test". This is in order to prove that they would be able to cope with interest rates substantially higher than the contract rate. This was relevant even for borrowers who had a down payment of 20 percent or more and was yet another tweak in what has felt like a long line of regulatory changes to actually get on, never mind being able to climb the property ladder.
Priced out of the market
These changes affected roughly 100,000 of Canada's population with half of these still being able to make a purchase other than what they had originally planned and the other half giving up altogether. So, although many people rushed either to buy or sell and upgrade to a property that they would not be able to afford when the new regulations came into force, many people found themselves priced out of a market that they could not afford to enter on paper . This is true even if they felt they had the financial means to do so or would have met the criteria set in previous years.
Buying your way back in
The inevitable rise in property prices across Canada was also seen to reach dizzy heights in the Toronto real estate market but what goes up must come down, and these tougher mortgage laws saw the market begin to balance out during 2018. This trend looks set to continue during the spring of 2019, and it is this news, along with February's announcement of thousands of newly-created jobs that is providing hope for those wishing to buy for the first time or move higher up the property ladder. With 665 new home developments also taking place in Toronto; it literally could become a buyer's market.
Although Ottawa and Montreal are beginning to see signs of renewed growth and hotting up, Toronto's real estate market is still generally said to be on the cool side at present, and the literal coolness of the weather hasn't helped either! A particularly harsh winter has made prospective buyers think twice about even being able to make property viewings and as it takes a while for the snow to thaw so will it take a while for the gradually warming spring temperatures to melt the "froideur" in the Toronto real estate market. More home listings are expected to appear on the market over the spring and summer months, perhaps bringing a modest increase in prices. But, with many other variables affecting real estate trends including elections and the economy; it could be that the Toronto market will neither be firmly in favor of either the buyer or seller but rather your own individual circumstances. Some people will, therefore, be winning, some losing and some breaking-even financially.
The demand for luxury homes and Condos IS expected to increase and as demand usually comes with an increase in prices; those selling these styles of properties look to be definitely in the winning camp. The average price of a luxury house is expected to reach $ 3,691,700 within the next twelve months and $ 2,390,405 for a condo.
It is not expected that the bank of Canada will increase interest rates more than once this year, but in the same vein, this means that they are unlikely to fall either. The rate is currently 4.375 percent for a 30-year fixed-rate mortgage but with mortgage rates remaining the critical factor in determining the affordability of a home purchase; keeping a close eye on the rate of interest is literally in a buyer's best interests!
Greater Toronto is a Land of hope
Although homeownership rates dropped in Canada for the first time in 45 years in 2018; it is still a country that has one of the highest homeownership rates in the world. More than 40 percent of households under 35 own their own property, and although Toronto is considered to be one of Canada's least affordable markets, there is still opportunity and hope in the real estate market to make a good investment.
Need for a Good Real Estate Lawyer in Toronto Downtown
Finding a good Real Estate Lawyer in downtown Toronto is equally as important as a find a good property to buy in Toronto. Some Lawyers provide great service but charge an arm and a leg for the transaction. Some Lawyer advertises their legal fees as the lowest but their service is equally the lowest in the market. Transparency in Legal Fees structure is one of the main issues with Real Estate Lawyer Fees structure in Toronto Downtown. The only Law Firm stands out from the crowd is Shaikh Law Firm because they have posted their Real Estate Lawyer Toronto Fees on their website. Their reviews suggest that they are transparent, honest and provide a good service. When this article was being published in 2019 Shaikh Law is ranked among the three best Real Estate Lawyers in Toronto, along with Jonathan G. Griffiths and Jay Teichman. Jonathan and Jay's quality of Legal Service is great but their legal fees are significantly higher than Shaikh Law Firm.
How to Choose a Good Real Estate Lawyer in Toronto Downtown
Before you hire your Real Estate Lawyer you should ask the following Questions;
1) How many transactions the Real Estate Lawyer completes in a Month?
2) How long has the Lawyer been practicing Real Estate?
3) What is the Fees Structure and can the Lawyer give a written Quote without any hidden charges?
You should always do your research online, ask a friend for any recommendations. It is important to note that your Realtor recommendations are always biased because they usually get kickbacks for recommending a Real Estate Lawyer. Therefore do your own research before you hire anyone. It is always recommended to call up the Real Estate Lawyer in Toronto for a Free Consultation to review your transaction before you engage anyone.