Toronto 9 March 2020. February real estate listings in the GTA were at the 2nd lowest level of inventory for a February since we have been keeping record. In February 2017 when we witnessed the lowest inventory ever, prices skyrocketed.  Similarly, last month Buyers emboldened with ever declining mortgage interest rates and the upcoming reduction in the stress test value, were in many cases forced to compete in all property types. Inventory level is currently at 5 weeks. A balanced market is considered to be 5 months of inventory. Yes, scary!!
The average selling price increased by +16.7% to $910,290. Double-digit average price growth was experienced for nearly all segments, including detached houses and condominium apartments. The sales volume was up too, +45.6% versus the very dismal February 2019. With low inventory and more aggressive buyers, this can only lead to more competition for fewer homes.

Now add to this a few twists. Last week a competitive 5-year Mortgage interest rate was 2.65%. This week 2.25% is potentially available for qualified buyers. By early April some buyers could qualify for 5% more home, thereby adding fuel to the fire. But at current levels of price increases will that even be enough?  The current price appreciation is unsustainable. Did your salary increase by 16.7% since last year? If you recall in 2017 by the time June came around prices were lower than they were in January of that year. That was simply supply catching up with demand. Will history repeat itself?

As the Coronavirus seemingly continues to spread worldwide, we are headed into global economic uncertainty. The price of oil has dropped to levels not seen since the Gulf war. This does not bode well for the Canadian economy. The Canadian dollar has begun to decline further in value, If you were hoping to sell some of your equities for your down payment on that house, you may find yourself with a shortfall as equities also continue to plunge in value.  Yes, we appear to be heading into scary times.
You may wish to seriously contemplate your next move and seek skilled real estate advice.

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