With the end of the year in sight, real estate experts are scrutinizing sales data, demographic trends and interest rates to try and divine what 2014 might bring for the Toronto market. Here, a few of the trends they’re expecting to surface.
Prices will still go up—but not quite as quickly.
Toronto house prices have historically appreciated about seven per cent a year on average. In 2014, they’re only projected to grow by 1.5 percent, according to a senior market analyst at the Canada Mortgage and Housing Corporation. The reason? The years of ultra-low mortgage rates are over, which will make many buyers think twice before they take on debt.
Millenials are poised to enter the market.
Fact one: the average age of a first-time buyer in the GTA is 37. Fact two: the echo boom generation is currently between 20 and 36 years old. That means the next few years will see hordes of millenials trying to make the leap from renter to homeowner—a shift that will have a deep impact on the market. (Don’t believe it? The mass of echo boomers currently living downtown has already sent rents skyrocketing and vacancy rates plummeting). Experts predict the shift will spur demand for affordable semis and townhouses in the downtown core and along transit lines.
The market will stagnate come spring. Or it won’t.
Sme experts believe that the usual December and January lull will be followed by an active spring market. Another contingent is convinced that the holiday doldrums will be worse than usual, and that things won’t improve in 2014. So, not very helpful.
People will keep moving from the suburbs to the core.
Pundits are much more confident predicting the continuation of the reverse migration from the suburbs to the downtown core. A survey of some 1,000 players in Canadian real estate by the Urban Land Institute and PricewaterhouseCoopers indicates that demand for office and retail spaces will also be strongest in the city centre—which may sound the death knell for suburban office parks that aren’t close to mass transit.
• House Hunting in … Toronto [New York Times]
• Echo boomers set to hit the housing market in 2016 [Toronto Star]
• Pundits sift Toronto home sales numbers for clues to 2014 [Globe and Mail]
• What 2014 could bring for Canada’s real estate sector [Toronto Star]