When will this GTA Market crash? February 2022
Well, it’s not.
There are too many factors that will continue to contribute to real estate values climbing. While we may not see the increases in 2022 that we saw in 2021 (coming out of covid fatigue) we will see values increase to near or above 10% this year.
So if you’re thinking of putting your money in stock or Mutual funds instead of real estate well, just know that the likely 10% increase in 2022 is better than most people would see from their stock and investment portfolios in a year.
Here are the top 3 reasons you won’t see a housing crash in the GTA anytime soon.
1- Interest rates are still historically low.
Although the Bank of Canada has said that there would be rate hikes this year they are unlikely to increase rates quickly. This is due in part to avoiding any economic panic. Rather look to a couple of small increases toward the back half of the year.
These hikes will not be enough to impact our current market conditions. At best it will eliminate a small percentage of buyers in this market. What that equates to is that you may only be bidding against 8 buyers rather than the 10 you would normally see on bid night.
2- Canada will continue to open its border to immigration.
With a reported nearly 400,000 new Canadians coming to Canada each year a significant percentage will be looking for property in the GTA. Many of those coming here are looking for a better life but also for the education system benefits and social-economic benefits. Many come with money to buy properties putting more pressure on the small pool of properties available. Those not coming prepared to buy will be prepared to rent which bolds well for rents to continue to increase for those holding investment properties.
3-Not enough housing is being built to supply the demand.
With the growth that is expected in the GTA, the building boom we have seen for years now is still not enough to offset the number of buyers in the market. our government at both the provincial and municipal level need serious reform to the building and permit processes. It takes far too long to get housing built in this province and that will continue to be a key factor in limiting housing available for those ready to buy.
In summary, those waiting for the market to crash so they can swoop in and buy up all the affordable Real estate will be waiting a while.
Even when a correction does hit it will likely not be significant enough to offset the factors I so clearly outlined for you above. Ok sure just say prices come down 25% but the 5 yr close rate is now up 1%, is affordability really any further ahead for buyers?
Well, it’s not.
The carrying cost over the course of a 25 year Amortization period is virtually the same.
So my last thought on this for you is that if you’re looking to buy property as a place to call your own and enjoy, don’t worry what the market will do just buy it. After all the old adage still holds true….. don’t wait to buy real estate, buy real estate and wait.