What should we expect in 2019 for Toronto real estate activity?

Ah, the crispness of winters air jolts you awake, as your feet hits the pavement on your brisk walk to work.

Sub-freezing temperatures combined with the on again/off again sprinkling of snow, have you pulling your toque down tightly over your ears, protecting you from Mother Nature’s bitter cold.

If you profession is aligned to the real estate industry, your thoughts drift off to the countless reports, forecasts, podcasts, webinars and info sessions that have been crossing your path and feeding your brain since November ’18 on what to expect for housing sales in 2019!

Before I dive in and give my two cents on what to expect in the coming year in the Toronto real estate market, let me take you back a bit, to the beginning of the preceding fall market.

In September 2018 I had written that the total number of property sales expected for 2018 throughout the GTA, would come in lower than what some forecasters were predicting at the time . See post here

The fall market was just starting and looking back over the first three quarters of sales activity, signs were clearly showing that a slow down was in place.

I had made mention that this would reflect in the lowest amount of sales activity we had seen in while, actually a long while, the year 2008. Everything the government had been doing of late to ‘cool’ the hot housing market, well, it was working.

Toronto and Vancouver are almost always hot topics on house prices and housing activity. Other markets were equally hot in their own right (Ottawa, Montreal, Calgary) but in Toronto it was clear that the condo market appreciation was puffing up the overall averages into the positive.

So, the surrounding areas and Toronto detached, semi-detached and townhouse values were slightly cooling, to which is being referred to as a soft landing rather than a bursting bubble. Of course, real estate can be national but is locally driven, meaning there are neighbourhoods where prices of the above housing types were increasing, and a few areas, were downright hot.

Some controversy surrounds if the term soft landing, even exists when it comes to housing prices, but that debate is left for another time. Now what does this mean for Toronto and GTA house prices over the coming year you ask?

In my humble opinion, if the government does nothing to interfere with the current rules in place, we’ll continue to see downward pressure on pricing. To what extent, well, nobody really knows? At best it would be an educated guess as the government has proven it will mingle when it feels its needed, even against popular opinion or on the long term affects it might have.

A close eye will be paid by me to the actual housing numbers changing hands, as this is a good indicator to what is happening in a market. People can be out looking at property, and this can look like a positive indicator, but if the activity in sales is low, then a shift could be underway?

I’ve made mention in earlier posts about the ‘depth’ of buyers, especially when it comes to multiple offer situations. A property gets listed for sale with an minimum expectation of $500,000 as the valued price. You have 5 buyers interested, and 4 of the 5 have offers are between $480,000-$500,000 with the 5th offer blowing the rest away with an offer of $550,000, is this the sign of a healthy or strong market? Some would say it is.

I guess for starters you could point out that there were 5 interested buyers, and 4 with reasonably priced offers. But the $550,000 is what gets recorded, and this number can at times be deceptive to what’s really going on. I won’t get started on some pricing practices of agents who list extremely low, just so they can “pad” their stats, but I will say that this method when used as the norm, is not constructive for any of the parties involved. I’ll tackle this topic further in a future post.

I also think long term thinking should always prevail when it comes to buying real estate. Waves come and go, and timing them is tricky at best, even for the worlds most prolific surfers.

Building a home is what most people are after. Somewhere to feel safe and secure. To raise a family, to live and grow in and entertain both family and friends. To benefit from the pride of home ownership and, whatever else they may dream up. When property is looked at purely as a commodity, it can blur even the most seasoned of us.

My hope is that with less sales activity the real estate pros rise to the top, and better eduction and transparency abides, our housing market will remain healthy and strong. That’s what 2019 will look like for me. My wishes are it does for you as well.

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