With these major buyers gone, the condo market will not be the same. In Greater Toronto Area, this effect could be devastating. Yet, by looking at the bigger picture, a rise in condo market seems more likely.
Toronto, Ontario (PRWEB) August 08, 2012
According to Canada Mortgage and Housing Corporation (CMHC), Toronto’s housing market remained one of the hottest in Canada during the first quarter of 2012. Housing sales and prices in GTA skyrocketed to new heights during this period. The Royal LePage House Price Survey states that the mid-march sales were up 7% compared to the same period of 2011. Shedding light over the price and sales trend in GTA, Marcus Arkan, CEO of Syndicate suggests that the hike was largely due to historic low mortgage rates.
The scenario was not expected to change anytime before 2013, stricter mortgage rules introduced last month have steered the speculations in a different direction. However, due to a strong housing market in Toronto, any prediction about mortgage trend or market prices would be too early. Mortgage expert Marcus Arkan has put forth an analysis of previous and current mortgage trends in order to predict future changes. He said, “All time low mortgage rates have fueled a high demand in the GTA. No one was expecting a major hike before 2013 but unfortunately the effect of new mortgage rules may spark a faster change. However, the question what will happen to the Toronto housing market shall the mortgage rate rise.”
Toronto Real Estate Board’s report showed that fixed mortgage rates in Toronto showed a sign of a rise in February. That was before the announcement of new mortgage rules were made by Mr. Flaherty. With lower amortization period and other major changes in mortgage rules, a large number of people waiting for favorable conditions will now be unable to afford a home. .
Mr. Arkan expressed fear that the housing industry, which lacks the supply to meet the heated demand for the past year will also cool down due to lower demand. As a result, Toronto’s condo market might also slightly slow down for the time being. “It won’t be surprising to see the condo market in GTA affected in the same manner for a while. However, as the mortgage rates will increase further, the condo market specifically in the Greater Toronto Area will go up in the coming years.”
According to a survey, every one in four properties listed in GTA is condo. While the housing market was not agile enough to meet the rising demand, CMHC’s report reveals that more than enough new condos were built during the past few years. This condo trend may not be very sustainable in case of higher mortgage and interest rates. Mr. Arkan predicts that condo prices might go down and this might spark a condo market boom in comparison to the cooling market for single family homes.
Expressing one of the biggest fears, one Mr. Arkan also stated that a large number of condo buyers are overseas investors. Traditionally, these investors have been found to be the first ones to pull out as soon as the market conditions deter. “With these major buyers gone, the condo market will not be the same. In Greater Toronto Area, this effect could be devastating. Yet, by looking at the bigger picture, a rise in condo market seems more likely. However, it is still too early to tell how sooner or later the change will actually occur.”
Based on all the stats and analysis presented by The Royal LePage, TREB, CMHC and several other Toronto mortgage experts,, Mr. Arkan suggests that the market value in the Greater Toronto Area is expected to decrease in 2013.
About Syndicate Mortgages Inc.
Syndicate Mortgages Inc. is one of the leading Canadian mortgage brokerage firms. Founded in 2008 in Ontario, the company specializes in residential, commercial and construction financing across Canada. With years of experience and expertise in the mortgage industry, and access to an array of lending institutions across Canada, Syndicate is known for finding the best mortgage rates for their customers. Syndicate has branch locations across Canada.