Well for starters, it must be said that we are living through interesting times in that with all of the changes brought into play over the past three years to cool the GTA’s hot housing market, changes which many forecasted would knock the sails out of sales (I couldn’t resist), we are still witnessing an overall strong resale market in Toronto! This can’t be ignored and we should actually take caution in this.

We always have to keep in mind that real estate is uber local with secondary factors that contribute to the overall makeup of Toronto’s diverse housing market. Why is it that condos for instance, in Toronto’s east end neighbourhood such as Leslieville, are selling like hot cakes and for more money per square foot than traditional established condominium neighbourhoods, such as mid town?

Or that a semi-detached home deemed a complete fixer upper in the central neighbourhood of Seaton Village, will sell for a similar price of a brand new detached home in East York? Oh yeah, that semi detached in Seaton Village only has street parking as well.

These are real life examples of how local real estate and their values must be understood and then applied to the neighbourhood you will want to buy, sell or invest in. So here we go with what to expect in 2018.

Throughout Toronto proper, supply of good properties that are well priced for their condition are still in relative short supply. All of the changes over the past few years have been aimed at the demand side – buyers, and the supply side continues to be in short supply. The same can be said and apply to larger sized condominiums (850 sq.ft.+). The demand for both of these will remain strong in the first half of the year, as pent up demand is still in play.

Interest rates have been forecast to rise and if we see rate hikes over the course of the year of 50 to 75 basis points as have been predicted, this could help balance demand even more.

Over the past few years the “selling seasons” throughout the course of the year seem to be shrinking. Remember, this may not be the case in your neighbourhood, but needs to be considered of you are buying and selling in different neighbourhoods. Remember what the second half of 2017 looked like…

Demand for entry level condos will continue to be very strong and this price point coupled with a strong and increasingly expensive rental market will continue put upward pressure on prices. I’ve been saying for at least the past eight years that the first time buyer home is a condo. Well, it’s here, embrace it, and starting building equity so that you can compete when it comes to wanting to move into that semi or detached house that has 10 offers on it. Put the benefits of a rising markets money to use and you will be ahead of the game financially and thankful that you did.

Overall I think a modest drop in overall annual sales volume will happen as the combination of government changes to the housing market, rising interest rates, affordability and buyer fatigue all come together.

Prices will continue to rise in Toronto albeit at rate closer to inflation than the double digit rate growth that has been the norm over the past decade.  As more buyers come back into the market this could push values even higher in the most desirable Toronto neighbourhoods.