Right Now Is The Best Time To Buy A GTA House Since 2015
For the first time in four years, the Toronto housing market is out of the red zone according to the Canadian Mortgage and Housing Corporation (CMHC). That’s good news for Toronto residents, but what does it actually look like?
The first step is understanding what makes a housing market vulnerable.
For the big picture snapshot, the CMHC considers multiple data and lines of evidence to generate a picture of vulnerability. These include the rate of demand outpacing supply, accelerated house prices, overvaluation of property, and elevated housing supply.
While Toronto is still vulnerable to price acceleration and a consistent demand, overvaluation – when home prices exceed income levels by an excessive amount – eased from moderate to low in the first three quarters of this year.
“From an overall perspective, there’s still a moderate degree of vulnerability but, of course with overvaluation easing, that has led to our assessment coming in at moderate,” Dana Senagama, manager of market analysis for Ontario, told the Toronto Star.
That said, certain housing types present more vulnerable sectors, as the demand for condos increases.
“While the activity has softened in the low-rise category, we are seeing heightened activity in the more price-friendly point for first-time buyers in condos and towns,” said Senagama. She says that home-buying activity has picked up since the first quarter of this year. Meanwhile the average home price increased by 0.8 per cent year-over-year in the second quarter of 2019 while disposable income levels also grew by 0.5 per cent.
“Supply continues to be the defining factor in the Toronto housing market – or rather the lack of supply- both in home ownership but also in rental,” said Senegama.
Fingers crossed John Tory’s Housing Now initiative and other provincial incentives can address that shortage within the year, so that the vulnerability stats can push Toronto into the green.