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A new chapter in Real Estate

A new chapter in Real Estate

 
Now that the winter frenzy in the GTA’s real estate market has subdued, many are left wondering what may come next. Should I invest or hold off? Is upsizing a good idea at the moment? Valid questions to ponder, with no easy clarity in sight. At times of uncertainty, it’s best to go back to the fundamentals. 
 
Despite the average 15-20% drop in prices from February to May, inventory has only increased by 1 month from 0.28 to 1.3 months of inventory on the market (meaning it would take 1.3 months to sell the current homes actively on the market). The rule of thumb is that you need 4-6 months of inventory to create a balanced market. The biggest difference between the slow-down of 2017 and 2022 is that this time around our inventory did not increase significantly. Interestingly, all areas have dropped in price, except for Toronto Central & West (location, location, location). 
 
In fact, all major developers agree that the biggest challenge in our market is creating new housing due to skyrocketing material cost, lack of manpower, and red tape. With the lack of new housing, increased immigration numbers, Canada’s geographical location and weather, I am hard-pressed to see anything but continued demand. 
 
If you are an investor, my best advice is to be patient and disciplined. Make decisions predominantly based on financial analysis, and as little future speculation as possible. Stay in the Resale Lane, unless an exceptional assignment or pre-con project surfaces. Feel free to reach out if you have any questions regarding our market, or if you are looking for a real estate opportunity! 
 
Happy Summer!