As we move into 2010, there are many who worry that the housing market may collapse as it did only a short year ago. That being said, there are many in the Toronto real estate market who say that while the housing market may not grow as much in 2010, it should stabilize and become more balanced. Throughout much of 2009, the housing market in the city was in the seller’s favor because there were more buyers than there were houses for sale. Now this is expected to change.
In a survey done by Royal Lepage, it is expected that housing prices in the Toronto area will grow by about five percent in 2010, which is a slower pace than the immense growth seen in 2009. In the fourth quarter of 2008, the price of homes in Toronto grew by 2.9 percent for condos and 3.5 percent for homes.
The reason that a five percent increase is expected is because more buyers with more money will be coming into the market because interest rates are so low. Right now, the interest rate set by the Bank of Canada is at .25 percent, the lowest ever. This is not expected to rise until June, which means plenty of buyers want to take advantage of it right now.
More condos are going to be built between January and June of 2010, and that means more homes on the market, which will help the overall real estate market begin to stabilize. Currently, Toronto and Vancouver are the two hottest real estate markets in the country, and both cities have helped to bring the entire Canadian real estate market, as well as the economy itself, up.
Many experts feel that there should not be a housing bubble anytime soon because of the stabilizing of the home prices in Toronto. Most expect that by the mid-part of the year, home prices will become more typical and the fast growth will slow considerably. One reason is the already mentioned increased interest rate, but the government is also looking at stricter rules for getting mortgages so that only people who can afford higher interest rates will be able to get a home. Individuals who cannot afford higher interest rates can see themselves fall behind. If enough fall behind, the housing market collapses like what was seen in the United States this past year and a half.
Posted: 2010-01-18 12:19:11
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