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Let's talk about Toronto Real Estate!
In January, the GTA witnessed a significant surge in home sales, driven by the appeal of lower fixed mortgage rates. Total sales were up by an impressive 37% compared to the previous year, with an additional 22.9% increase from December.
This surge in sales wasn't confined to any specific housing type; rather, there was heightened demand across the board, particularly for semi-detached homes and condominiums.
Despite a slight decrease in the average home price, optimism is brewing within the market as we anticipate a rebound in prices with the potential for further decline in interest rates, setting the stage for a promising Spring market.
Tune into Alex's latest video where he goes over all the numbers in detail!
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Interest Rate Update
From Sean Smith of Dominion Lending
The Bank of Canada held the overnight rate at 5% for the fourth consecutive meeting but provided an outlook suggesting that monetary easing (rate cuts) will begin by mid-year. This is consistent with recent market predictions. Full Bank of Canada press release HERE.
The Bank forecasts a soft landing for the Canadian economy, with inflation falling to 2.5% by the end of this year. While some economists predict a recession, the Bank suggests that "growth will likely remain close to zero through the first quarter of 2024" and "strengthen gradually around the middle of 2024." This would be a soft landing.
There is a good chance that monetary tightening has done its job, and inflation will trend downward in the coming months. As we have seen, the road to 2% inflation is bumpy, but we are heading there probably sooner than the Bank expects. As predicted, they are staying the course for now, but multiple rate cuts are likely this year. The scheduled dates for announcing the policy rate are March 6, April 10, June 5 and July 24. The Bank of Canada will begin cutting the overnight rate somewhere in there.
For now, most are betting on the June meeting, but if they are wrong, it will likely be sooner rather than later. Once they begin to take rates down, they will do so gradually, 25 basis points at a time, and over a series of meetings. We could well see rates fall by 100-to-150 bps this year. Risks to the outlook remain, as always.
Preparing for 2024:
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Renewals: If your mortgage is renewing in 2024, please get in touch with us if you haven't heard from us already. The earlier we plan, the better.
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Refinancing plans: If you plan on taking equity out of your property this year, please get in touch with us as soon as possible so we can plan and advise you properly. The earlier we plan, the better.
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Purchasing plans: If you are planning on purchasing a new home, investment property or vacation home in 2024, please get in touch with us. We can get you a real pre-approval while also discussing all of your options including porting your mortgage.
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Lower interest rates: We track all of our clients interest rates and monitor them against lower rates that come available. If we can potentially save you money, we will be in touch. If you have a mortgage that you would like us to track, and we didn't originally do it, please let us know and we can input it into our system and track it for you.
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