As 2019 comes to an end, it’s important to reflect on the past year of home sales, purchases, and changes to the market. The Toronto housing market was on fire for much of the year, but there were also some challenges for buyers along the way. As the GTA population grew, the demand for housing options also rose. This created some interesting dynamics in the market. Keep reading for our insights on 2019 in real estate.
House Prices Increased
When demand exceeds supply, prices rise. That’s exactly what we saw in Toronto this year. The lack of space in the city meant the supply of detached houses for sale was lower than in other cities. Sellers were able to get amazing prices for their homes due to this competition. House prices on average increased by 13 per cent between January and December of 2019. The most notable increases were for detached homes with 5+ bedrooms.
The prices for detached houses increased quite a bit in 2019, but it was nothing compared to the cost of condominiums. For buyers who saw house prices as out of their budgets, condos were the next best option to enter the market. This caused significant demand on the condominium market which drew prices up by 4 times. It wasn’t just new condo units getting sold for lucrative amounts. Resale condos were seeing an increase over 4 times. Condo prices for both new and resale grew significantly faster than house prices.
New Buyers Given a Hand
The newly re-elected Liberal government made it easier for first-time homebuyers to enter the market. The original incentive program said first-time buyers must have a family income of less than $120,000. To qualify for the program, their mortgage and subsidy from Canada Mortgage and Housing Corporation (CMHM) had to be below $450,000. Changes to the program made the maximum income level $150,000 and include a total ceiling of $750,000. Thanks to this increase in eligibility, more buyers are in the market.
Hot Market is Cold for Some
Of course, the downside of having such a flaming hot market is that it pushes some people out. As home prices increase and the competition gets fiercer, low-income Torontonians are at a loss for affordable housing. It’s the double-edged sword of the real estate market. We want buyers to get large profits, but we also want buyers to be able to afford to participate. Since prices aren’t expected to decrease substantially anytime soon, new developments for lower-income housing are needed.
2019 was an exciting year for our team. We got to work with some amazing clients and help many people find their dream homes. And we’re not slowing down! Contact us to list your home or to find your next one.