How Torontonians Can Take Advantage Of The Current “Buyer’s Market”
By Digital Aptech - Jul 15,2022
The Toronto real estate market has been on fire for the last 18 months due to many having an appetite for investments after the COVID-19 pandemic. The demand for housing in the Greater Toronto Area (GTA) overflooded the supply resulting in a bidding war between many home buyers. With such intense inflation from internal and external market forces, the Canadian Government increased the interest rate by 0.5% during May and saw another 0.5% in June. This counteraction against inflation showed new developments in the Toronto real estate market. The new analysis and statistics for the current year of 2022 have changed the pace of the ever-changing Toronto market.
The May 2022 analysis of the market revealed that the average home price dropped a whopping 9% in comparison to February’s 28% increase from the year 2021. Side by side the 9% drop shows a powerful change within the market, February 2022 averaged $1,334,544, in home prices while May 2022 averaged $1,212,806.
From another perspective, we can compare May 2022’s performance to May 2021’s. In May 2022, the market saw a decrease of 38.8% in volume of sales in comparison to the previous year. With the sellers having preferences on when to buy a home, sellers still pushed their listing which made May 2022’s new listing identical to May 2021’s.
With the appearance of new listings, lower average prices, and current interest rates, this can be the perfect opportunity for buyers, especially those looking to be first-time homeowners to finally invest in a new home.
The most advantageous scenario for those interested in looking for a new home is to have the power over the purchase – this is the “Buyer’s Market”. The buyer’s market is assessed through the analysis of “Months of Inventory”, in short, the Months of Inventory is the data that provides market experts on how it would take to sell all the homes currently listed at the pace of the market’s volume of sales. This data is then used to determine whether it is balanced, the seller’s or a buyer’s market would be the number of months all the listings would sell.
As many experts examine the current real estate market, many experts have voiced their opinions on the current state of the GTA. The industry group that represents Canada’s real estate agents has announced that the current market is shifting from a seller’s market to a balanced market.
However, the rising interest rates from the Bank of Canada have impacted buyers’ psychology from having to buy right away to holding back and assessing the market’s current statistics.
Many buyers are hopeful that the frenzy of the real estate market continues to subside and give them further options for an affordable investment.
Furthermore, the research from the Bank of Montreal has proven the city of Toronto to be in a buyers market.
So how can you take advantage of the current market? The buyers market favours the buyer as many homes stay listed on the market many homes would experience a price reduction due to the increased supply. With data showing the market is steadily decreasing many buyers can even out their choices and seek the best home that fits their needs. With the price reduction on already lower than average home prices, many sellers are desperate to sell their homes. This can be an incentive for those looking to further negotiate prices, packages, and deals on their investment.
With the market ever-changing, what has come down has to eventually see itself come back up. Make sure to assess your options carefully, negotiate and present a strong and attractive offer, and be as responsive and flexible.
Whether it be the rising interest rates, the external forces in Ukraine and China, or the change in buyers’ psychology, achieving an investment in this current time would prove to be advantageous and still evident.