After GTA’s real estate market monstrous move of 33% since last year, both prospective buyers and sellers question the market sanity. However, improving economic situation (at least according to Governor Poloz) may still support price increases this year. First, mortgage interest rates are not expected to fall anytime soon. Second, population growth will support demand for housing, while housing construction will not stay as high as before. Reasonably, we should expect further growth in condominium prices and single-family homes, however at slow rates. Let’s say, the market went too fast too high.
After 17 years of rising prices, it’s not absolutely clear where the current real estate cycle is headed. A significant correction is highly unlikely given the general economic situation and influx of immigrants. The government may increase taxes, on land transfer or capital gains, however, the reaction is expected to be muted and may not change the trend.
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