What is in store for Toronto, Ontario housing market?

5 Replies

Hi, I would like to know what investors from Ontario, Canada think of the market here in GTA. I am still new to investment world and don’t have much of experience or knowledge of how to analyze the market. We all can see  that there is a huge slow down and a lot of markets got flat and wonder if savvy investors think that it might sink further, especially now with mortgage rate going up again in October. Is there a hope that it might improve in spring or will it burst?

I have no crystal ball but the strong rental market in downtown core are driving some niche markets. If you have a rental that is paying off your mortgage I wouldn’t worry too much about unloading it.
I forsee the rental market to be strong for a long time. The province is trying to find ways to develop affordable housing and it will never happen. A large portion of millennials will rent or live with parents and keep on dreaming to buy a home.
Rental market and population growth is keeping the market stable for the time being.

I'd have to agree Hai. I think sales will be flat or decline a bit but inventory will remain tight. I do expect small gains in prices.

Even if this affordable housing initiative works perfectly the effects won't be felt for a number of years. That in conjunction with planned immigration numbers into the GTA make it a pretty safe bet in my eyes. I think it would take pretty strong ecenomic shock felt globally to see it roll out otherwise.

I also wouldnt be surprised if there was some relief provided in the mortgage stress rules. Given the average rent in the GTA and increasing interest rates the stress will become even more extreme if let as it is.

Housing shortages aren't cured overnight.

And a heads up. some of the big 5 banks appear to be increasing their posted rates. Could mean a change in the Bank of Canada qualifying rate which would effect your purchases and refinances.

Originally posted by @Robert Ganzhorn :

I'd have to agree Hai. I think sales will be flat or decline a bit but inventory will remain tight. I do expect small gains in prices.

Even if this affordable housing initiative works perfectly the effects won't be felt for a number of years. That in conjunction with planned immigration numbers into the GTA make it a pretty safe bet in my eyes. I think it would take pretty strong ecenomic shock felt globally to see it roll out otherwise.

I also wouldnt be surprised if there was some relief provided in the mortgage stress rules. Given the average rent in the GTA and increasing interest rates the stress will become even more extreme if let as it is.

Housing shortages aren't cured overnight.

And a heads up. some of the big 5 banks appear to be increasing their posted rates. Could mean a change in the Bank of Canada qualifying rate which would effect your purchases and refinances.

Totally agree..  If I am not mistaken I heard a few weeks ago that there is more relief on underwriting self employed individuals on declaring income. I am guessing underwriters will exclude your auto expense, cell phone and internet as everyone is paying that across the board..

Well there were always add backs (typically CCA, home office expenses and auto) but the biggest change with it was for consideration of being self employed for less than two years. That was a hard and fast rule. Now they will consider less than two years with some evidence that the business will/continue to be successful i.e. you're in the same industry you were in previously, you bought a thriving business with an existing cutomer base etc.. They will also now consider alternative proof of income rather than just your notice of assessment from CRA.

Also that announcement was from CMHC for insured mortgages. Its not being followed by the other two mortgage insurers as far as I know. And we will have to see what the actual lenders do with it. I doubt they will extend it to the "A" lending portfolio as many of them have thriving "B" portfolios due to the extremely difficult lending environment the federal government has created in an attempt to help the affordable housing problem that was created by them in the first place. 

I personally think it won't make a spit of difference in larger cities but may help for other areas