2020 has been the busiest Winter market I have ever had in my career. And I know I am not the only one experiencing this crazy market. Usually the Spring Market craziness starts in March but Spring came early and buyers are out in drones.
I do this prediction post every year so you can look back and fact check me:)
2020 is going to be an exciting year for Real Estate so lets get into it.
Interest rates will be big this year. I do not see the government raising rates as the economy is pretty flat. I do see potential in them cutting rates probably mid year. If this does happen it will cause a ripple effect into the housing market. Buyer's will come out in drones.
The resale market is on fire right now. Anything downtown under 700k is going into multiples and selling way above asking. Agents are underpricing to attract crowds and it is working. If you have a smaller condo you have considered selling now is the time. Although we will see a record number of new build completions this year I do not believe it will help prices. The majority of these units will most likely hit the rental market not resale.
Where consumers will see some relief is in the rental market. There is a ton of inventory in the city right now so tenants have more choice and negociating power. It is not the time to increase rental pricing like we have been the past few years. Price correctly otherwise it will sit. I am also seeing this in the suburbs as well. It is taking on average 40-60 days to find a tenant. You need to plan accordingly otherwise it will cost you.
The stress test is continuing to be a point affecting 1 out of 5 people. I doubt the government will get rid of this policy however I wish they would reevaluate this. It would get a lot more buyers out of renting and into owning.
Supply will continue to be an issue throughout the GTA. There is a serious lack of good product on the market and anything that is half decent is selling fast. As an investor I see a ton of potential for small flips, condo flipping will get lot bigger in the next few years. Downtown it impossble for there to ever be enough supply for the demand and this will push people out to the suburbs more and more.
Immigration will be one of the biggest factors in the housing market. With the Liberal government we have seen record numbers in the past few years. Just under 50% of all immigrants come to the GTA. Immigration is great, multiculturalisim is what makes Canada so great. Most immigrants are skilled, own businesses and are bringing a significant amount of captial to the country. Most immigrants are highly motivated to buy realo estate as it is hard for them to do in their own countries. They are also more likely to buy as a family in order to afford a home, they will wait a few years to build equity in order to buy more. They also are likely to buy investments with their family and friends.
Price growth will be steady Downtown between 7-9%. Condos will lead the way. Durham region will still grow however I think this growth will be more stagnant until Durham Live is finished. With all of the new construction happening in the region it will keep prices more stable. York and Peel region will both continue to explode as there isn't as much new inventory and high demand for those areas from those who cannot afford to live downtown.
Thanks for reading and let's make some money!