Now, I am no economist and I certainly don’t allow for all those crazy things like GDP, CDN $, trade deficit, and immigration factors – what do I know about such lofty things? What I do
know is real estate; specifically, localized real estate.
In order to anticipate the future, we must first look at the past. So let’s look at York Region in the past five years across all housing styles, the current market circumstances and how this may play out heading into 2017.
Housing Prices: Year-Over-Year
We start with how much housing prices have risen, year-over-year:
|Year||% Increase over Previous Year|
|2016||24% by 3rd Quarter|
We saw increases up to 12.6% year-over-year and although the numbers are not in yet for all of 2016, house prices by the 3rd quarter were up an incredible 24% since the end of 2015.
Housing Prices: First 90 Days
Now, let’s look at what happens from the end of the 4th quarter of the previous year, to the end of the first quarter of the next year – mere 90 days later…
|4th Quarter||1st Quarter||% Increase|
So the writing was on the wall in 2016 for a considerable increase in house prices in just the first 90 days.
Outside of the mortgage rule changes, in all other regards the market conditions have not changed. Of note, the two biggest factors to soaring house prices are the increase of buyers flooding the GTA coupled with the lack of new building permits keeping pace. (We can thank the Places to Grow Act of 2005 for this massive issue in our supply of homes. No matter which side of the Greenbelt protection you are on, this is a home grown crisis.)
The Number of Homes Need to Catch Up
Quite simply, we do not have near enough homes in the GTA to support growth and this problem will not go away overnight. People talk about a lack of inventory driving prices higher. Even if we did have an increase of inventory, there would still not be enough homes.
Prices Will Rise
With the cloud of confusion gone surrounding the mortgage rule changes in October, we can expect to see double digit % growth in prices in York Region and pushing north, east and west beyond the GTA. For those considering a sale, now is a great time to cash in on the growth of 2016, or you can hold out a little longer and still come out on top.
Will we see a similar number such as this year’s 24% increase? It’s hard to say, but don’t be surprised if it happens again. I anticipate prices to go up by about 10% by the end of March 2017 and am equally bullish on prices pushing up close to 15% by the end of 2017.
This assumes all other conditions in the market remain unchanged and until we see a decrease in immigration into the GTA and a substantial increase in new builds, there’s not much to stop the prices from going up.
Still a Great Time to Buy
It’s important to remember that there are always opportunities for buyers, in any market. Be prepared to jump in fast before the prices rise again, have a solid deposit and be flexible on how best to protect yourself in an Agreement.
If you have your eyes and heart set on a home or neighbourhood, now could be the best time to land in the home of your dreams.
Where to Buy?
All things considered, there are some areas that are not seeing as rapid a price increase – for now. Not to say the prices are not going higher – just not the ‘eye-popping’ price increases in the immediate GTA. I personally believe one of the best places in the GTA to buy now is just north – think about Innisfil and South Barrie.
So let’s get together and talk about your goals. Grabbing a coffee comes with no obligation. Just a nice chat and exploring what the next steps may look like.