2021 Hot Real Estate Market is Different From 2016

Since 1974, there have always been negative people who thought that the market would crash for various reasons. Actually, it was the case 4-5 months ago in Toronto. Despite all those horror stories of negative approaches. Toronto's real estate market has substantially grown by %13.5 since the first opening started in May 2020. We can not compare Toronto's uniqueness to Paris, Moscow and Istanbul. Toronto has a steady population growth due to the fact that it attracts international students, foreign immigration and domestic immigration. Toronto - Waterloo Technology corridor is about to become very valuable to large tech companies in order to find an investment area.

In 2016, the Central Bank of Canada was in a different situation as it had to act as fast as possible in order to change the rules of mortgage as they had to find ways to position a soft landing in the hot housing market. However, currently the Central Bank of Canada insistently keeps saying that the rates will stay low to boost the economy as the general economic outlook does not have the same power as 2016. In this case, the only option is to increase the supply, just like last week the Federal Government stated that they will finance many housing projects in BC to increase the housing supply. Expediting permit duration in municipalities by using electronic processing, increasing housing supplies are the necessary approaches but in any case it takes time to suppress the hot market.

Our mortgage rates and standards are very different from 2016, it is a lot lower and will continue to stay low. Housing trends are also different: in 2016, we used to build free-hold towns and semi-detached homes to add more houses to the market and those kinds of projects will be added to the market within 9 to 16 months. But now in 2021, free-hold towns, semi-detached or detached homes are out of reach, therefore the builders are building condo-towns and condos, and these housings take 24 to 48 months to construct due to various reasons. 

Demand for real estate in Toronto will continue to increase: 

IMMEDIATE FUTURE: paused decision to buy, strong sales, low rates will initiate, 

NEAR FUTURE: hold back immigration, international students will create tremendous demand. 

NEXT 5 YEARS: The return of people who moved to small towns of Ontario to the Greater Toronto area will add to supply shortage, and will result in driving the prices higher. In the next 5 years the hottest cities will be Vaughan and Oakville North. You should be concerned if you are not working with the right professional because what you buy, where you buy is extremely important.

Seyfi Tomar