Real Estate Cheat Sheet: four trends to expect in 2014
Whether or not you think 2013 was a good year for Toronto real estate depends, to a large degree, on where you stand in the market. Things are still relatively good for owners of single-family homes, but renters and condo owners face a more complicated reality. Here’s a look at how things are shaping up for Toronto’s real estate market in 2014.
1. Home prices will probably keep rising
Despite constant warnings from analysts that Toronto’s real estate market is overheated, things were great—a little too great, even–throughout 2013. A recent forecast by Central 1 Credit Union says we can expect continued growth in coming years, with an average four per cent annual rise in home prices through 2016. The forecast also calls for Toronto’s condo market to slow, but not crash. Rental vacancy rates are expected to stay frustratingly low. [Canadian Press]
2. Picking out a brokerage is going to get more complicated
Real estate brokers were once forbidden from charging both a flat fee and a commission, but the provincial government changed the rules in November. Now, brokers can charge any combination of those two things. As a result, it’s likely that dealing with agents is going to get trickier: what used to be a relatively simple arrangement will become a negotiation over how, exactly, payment is going to be calculated. This could turn out to be a good thing for consumers—at least in theory, it will introduce more flexibility and compeition into broker fees. [Ontario Government]
3. New home builds aren’t going anywhere
The former military base at Downsview Park has been under redevelopment for some time, but in November it was announced that Mattamy Homes would be partnering with Urbancorp to develop 1,000 units of housing in the area. The involvement of Mattamy means things will likely start moving quickly, and it points to continued interest in newly built homes. [Toronto Star]
4. The condo market will continue to be clouded by uncertainty
A continual source of uncertainty in Toronto’s condo market is the notion that the whole thing is being driven by speculation—that people are buying condos as investments, rather than living in them. If that’s true, then the market is vulnerable to investor panic, which can lead to a crash. A new report from the Canadian Mortgage and Housing Corporation does little to assuage that worry. It says about 23 per cent of Toronto’s condo stock is being rented out by owner-investors. Some experts think the true figure is closer to 50 per cent. [Toronto Star]
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Whether or not you think 2013 was a good year for Toronto real estate depends, to a large degree, on where you stand in the market. Things are still relatively good for owners of single-family homes, but renters and condo owners face a more complicated reality. Here's a look at how things are shaping up for Toronto's real estate market in 2014.
1. Home prices will probably keep rising
Despite constant warnings from analysts that Toronto's real estate market is overheated, things were great—a little too great, even–throughout 2013. A recent forecast by Central 1 Credit Union says we can expect continued growth in coming years, with an average four per cent annual rise in home prices through 2016. The forecast also calls for Toronto's condo market to slow, but not crash. Rental vacancy rates are expected to stay frustratingly low. [Canadian Press]
2. Picking out a brokerage is going to get more complicated
Real estate brokers were once forbidden from charging both a flat fee and a commission, but the provincial government changed the rules in November. Now, brokers can charge any combination of those two things. As a result, it's likely that dealing with agents is going to get trickier: what used to be a relatively simple arrangement will become a negotiation over how, exactly, payment is going to be calculated. This could turn out to be a good thing for consumers—at least in theory, it will introduce more flexibility and compeition into broker fees. [Ontario Government]
3. New home builds aren't going anywhere
The former military base at Downsview Park has been under redevelopment for some time, but in November it was announced that Mattamy Homes would be partnering with Urbancorp to develop 1,000 units of housing in the area. The involvement of Mattamy means things will likely start moving quickly, and it points to continued interest in newly built homes. [Toronto Star]
4. The condo market will continue to be clouded by uncertainty
A continual source of uncertainty in Toronto's condo market is the notion that the whole thing is being driven by speculation—that people are buying condos as investments, rather than living in them. If that's true, then the market is vulnerable to investor panic, which can lead to a crash. A new report from the Canadian Mortgage and Housing Corporation does little to assuage that worry. It says about 23 per cent of Toronto's condo stock is being rented out by owner-investors. Some experts think the true figure is closer to 50 per cent. [Toronto Star]){kind=link}
I don’t see how the condo prices alone can collapse when houses start at half a million. There will always be a market for lower priced housing in Toronto. If condos crash, then houses will too because no-one will pay $500,000 for a crappy house if a condo costs $150.000….
Re: #3 and #4. First, never use Torstar as “definitive source” for any financial, monetary or political facts.
Second, I think you are wrong (perhaps by the Torstar input) on both 3&4.
#3 New building permits/starts etc in Freehold (non high rise condo) are all long-before sold. What you want to watch is “signed agreements to purchase “…these are the demand….and watch “project openings” this is supply.
#4 the condo market is segmented. No general, all inclusive headline can hope to be accurate.
A) units designed for flipping (assign b4 final closing) are selling like mad (via the resale realtors(tm) networks)
B) units designed for tenant occupation ( for long term, albeit mainly first-time investors ) are selling well
C) luxury units are not selling on resale market and new (standing inventory) units are selling very slowly (at $ discounts and with add-ins and extras and bonuses)
D) resales are selling fast at best-ever prices – any units in buildings that won’t sell at owners’ expected price, simply gets rented to 20-somethings getting their”first place” with the $$ from their first good job
the condo market is not going to crash but i can see prices dropping modestly, especially for the smaller size units around 500 sq ft, in regards to houses, detached or semi-detached, i don’t see these ever dropping, since most of them have basements or units available for rent, which most families prefer,and each $500-600 in rental income can cover $100k in extra mortgage, that is also one of the main reasons why houses have been going up in value, and this is not even looking at the space of houses which is more than double of what yo will get in a condo. I think 2014 will be fine in terms of condo prices, but going into late 2015-2016, this is where the price dropping will start as the supply of condos will be at it peak and the rental prices are at their peak, which will cause break-even marginally negative cash flow for most condo owners when the interest rates go up and the time comes for them to renew their mortgage. Overall, what buyers should be doing is looking for lower priced condos to begin with and don’t overpay, the people who are overpaying will be the ones stuck in a bad situation. FYI, i’m a real estate agent studying the market for a while and purchased a property recently (not a condo)
Truth about source on financial, monetary or political facts.
http://www.furnishedtorontoapartment.com/
In the case of condo sales,
let’s not forget the obvious which is that uncertainty and speculation in real
estate has also accounted for millions of dollars in extra sales. It’s in an investors best interest to pay close
attn to the #1 Condo TV show in North America
– http://www.CondoShow.com
If you are good at real estate you can easily find good prices in both condo and houses, there is not going to be any uncertainty in coming months. I believe these are just a build-up that’s given to have a common price around Toronto. The unexpected offers will make the buyers will be an offer they can’t refuse, and that’s what an real estate professional always targets to have.
http://www.richardrobbins.com/blog/2014/09/never-forget-it-always-comes-down-to-value