Why The Next Few Months May Be The Best Time to Buy Toronto Real Estate
Friday Jul 28th, 2023
People buy real estate for various reasons, but the timing depends on many personal factors. Many wait to reach a major life milestone first, whereas others may take advantage of opportunities that arise.
As interest rates have been rising since the Spring of 2022, we’ve seen a notable drop in sales volume. While higher interest rates do impact buyer behaviour, a large part of the decline in the number of sales can also be attributed to low inventory experienced in many pockets of the GTA. However, since the peak in prices back February 2022, the Bank of Canada has raised the overnight rate 10 times. With each rate hike, buyers are qualifying for less, and it’s becoming too expensive for some to reach their original real estate goals of buying in certain areas. We have noticed most recently that buyer motivation has cooled even more.
Despite interest rates currently at their highest level in 22 years, the Bank of Canada has said that they would possibly decide on another increase to try to manage current inflation levels if the economic forecast in September is not where they want it to be. So while buyer activity is slowing, why should you start looking into buying real estate in the coming months?
- INCREASED INVENTORY – with fewer buyers on the market, inventory levels will start to rise. With more properties available to choose from, buyers should see more opportunities for negotiation and less competition (and fewer multiple offer situations). While most segments of the GTA have been in a balanced market since the peak, we’re now heading into a buyer’s market.
- DISTRESSED SELLERS – this term is used to describe those who NEED to sell due to personal financial situations, job relocations, divorce, death, etc. In a slowing market where there are fewer buyers and motivated sellers, savvy real estate buyers could scoop up something by bidding on the right place at the right time.
- NO FOREIGN BUYERS – we are still within the 2-year ban on foreign buyers so again, less competition on the buying side, which also means less likelihood that buyers will have to pay a premium to “outbid” other buyers.
- WHERE IS THE BOTTOM? – once signals point to a stabilization or a decline in interest rates is on the horizon, buyer demand will surge. No one is able to predict when prices will reach the “bottom” or lowest point until we’re already on the rise. So why wait until prices are heating up with increased buyer confidence/activity? Get in the market before everyone else jumps in.
Overall, we encourage our clients to make decisions that are best for them and their families in the present – with the current interest rates, with their current jobs, and with what’s currently available on the market. Often, when you’re looking for something specific (ie. In a particular pocket or school cachement area, in a condo building that features a certain view, that unique lot, that special new-build, a rare feature like a pool or penthouse etc.), in order to own that property, it’s not always about timing, it’s about opportunity. However, if you were previously looking to move or are still thinking that it’s time for a move, then get yourself ready to take advantage of a buying opportunity that may arise in the coming months as it may be your best time.