In the 23 minute video below, Jason Mercer, the Toronto Real Estate Board’s Senior Manager of Market Analysis, presents his views on the outlook for the Greater Toronto Area real estate market over the coming year.
Here are some of the highlights:
- Total sales were down in the second half of 2012 as compared with 2011, after increasing in the first half of the year.
- The main reason for the decline in sales in the second half was the introduction of new, stricter mortgage rules by the federal government in July. The most significant of these changes was the reduction in maximum amortization for high ratio mortgages from 30 years to 25 years.
- There was a big difference between freehold and condominium sales in 2012. The inventory of freehold properties for sale was close to all time highs, and prices increased significantly, while the inventory of condominiums for sale was very high and prices were flat to declining.
- Employment growth in the GTA was strong in 2013, and incomes are projected to grow by about 3% in 2013.
- Interest rates will remain very low through 2013, with the possibility of a small increase toward the end of the year.
- Sales in 2013 will be lower than in 2012, while inventories will increase.
- Prices will increase by 3-4%. Most of the increase will be concentrated in freehold properties, with condominium prices flat to slightly declining.
Overall, this is a “soft landing” forecast, perhaps a bit more optimistic than some other analysts’ projections. In any case, the possibility of a downward correction in prices (excepting possibly condos) seems remote.