{"id":6669,"date":"2017-08-14T11:11:55","date_gmt":"2017-08-14T18:11:55","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=6669"},"modified":"2017-08-11T19:38:49","modified_gmt":"2017-08-12T02:38:49","slug":"downturn-or-breather-in-housing-market","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2017\/08\/downturn-or-breather-in-housing-market\/","title":{"rendered":"Downturn or Breather in Housing Market?"},"content":{"rendered":"<p style=\"text-align: justify;\">Price pressure and inventory-shortage argue against characterizing the current summer market as a \u201cdownturn\u201d \u2014 versus a short lull \u2014 in the market. While this may dash the hopes of struggling first-time buyers, demographics and listing supply make it highly unlikely that the market will downturn past the summer months. At most, the lull would last 5 months, as it did in Vancouver, but it is likely that demand and short supply will snap the market upwards in the fall \u2014 typically a hot season in real-estate.<\/p>\n<p style=\"text-align: justify;\"><em>Long term stability can only come from an increase in supply. Fortunately, a return to wild price-increases is unlikely. Long term, the only way to modulate the market is a concerted effort to build new inventory and improvements to commuting infrastructures.<\/em><\/p>\n<p style=\"text-align: justify;\"><strong>New condominium upsurge<\/strong><\/p>\n<p style=\"text-align: justify;\">The market is ripe especially for new condominium developments, due to the change in preference of young families towards \u201cvertical living.\u201d This trend is seen mostly in the larger multi-bedroom units that will suit couples planning a family or young families, or down-sizing baby boomers. The market will still be strong in smaller units, especially new-build, but the highest growth is anticipated to come from young families and down-sizing boomers.<\/p>\n<p style=\"text-align: justify;\">Lack of inventory and affordability are the key reasons buyers are adjusting preferences to new-build condominiums. New condominiums tend to have lower maintenance fees and more amenities \u2014 increasingly family-friendly common elements. Older condominium resales will likely remain strong as well, especially among new buyers ready to move this year.<\/p>\n<p style=\"text-align: justify;\"><strong>Five pressures on market<\/strong><\/p>\n<p style=\"text-align: justify;\">The five pressures on the market make it unlikely we are in any kind of sustained downturn :<br \/>\n\u2022 Demographics and immigration : the majority of immigrants still settle in the GTA and, demographically, young families are coming into the market. Also, as numbers from the Ontario government indicated, the target of the recent Ontario Fair Housing<br \/>\n\u2022 Location relative to employment : with the majority of available employment found in the GTA area \u2014 and with long commute times in increasingly congested road systems \u2014 it is unlikely buyers will focus on less-expensive markets.<br \/>\n\u2022 Inventory : with an ongoing short supply, the long-term outlook can only improve with new development, making it likely the market will rebound by fall.<br \/>\n\u2022 History : markets always increase, historically, and even government interventions \u2014 such as seen in Vancouver (which only pulled down the market for five months) \u2014 are unlikely to have any sustained impact.<br \/>\n\u2022 Change in preferences : the new preference for a high-rise with good location will pressure new condominium sales and condo resales upwards.<\/p>\n<p style=\"text-align: justify;\"><strong>History : Vancouver example<\/strong><\/p>\n<p style=\"text-align: justify;\">The BC government led the way for Ontario, with interventions designed to discourage foreign national investment. Ontario followed with similar rules.<\/p>\n<p style=\"text-align: justify;\"><em>The prices did drop in Vancouver, from an average of $933,100 (all housing types) versus January 2017 at four-percent less, or $896,000. Then, pressured by short supply and high demand, the market surged back by July of 2017 to $1.02 million (rounded) \u2014 an increase of 8.7 percent.<\/em><\/p>\n<p style=\"text-align: justify;\">The other lesson from history is that real estate \u2014 especially urban \u2014 will always increase, except in the short term, even after significant events (for example, wars, depressions, recessions).<\/p>\n<p style=\"text-align: justify;\"><strong>Demographics : Toronto to grow at least 1.6% each year<\/strong><\/p>\n<p style=\"text-align: justify;\">From now until 2019, most experts agree that the population in Toronto area will grow annually by about 109,000 (rounded) or 1.6 percent. By 2019, the population should reach 7.1 million.<\/p>\n<p style=\"text-align: justify;\">Additional pressures come from the demographics of age. The median age in the last census was 39.2 years. With delayed buying by Millennials, and increased buying pressure from down-sizing boomers \u2014 demand will continue to outpace supply.<\/p>\n<p style=\"text-align: justify;\"><strong>Demand and price pressure<\/strong><\/p>\n<p style=\"text-align: justify;\">The numbers are already in for summer, and although they clearly show a strong pull back on sales, price pressures continued. Prices still jumped up, especially for new condominiums. New condominiums also showed strong sales. The MLS Home Index Price Composite soared by 18 percent July 2017 over July 2016, although it was down 4.6 percent month over month.<\/p>\n<p><a href=\"http:\/\/condo.ca\/downturn-breather-housing-market-demographics-inventory-history-new-build-sales-trends-suggest-market-fall-will-sharply-bounce-back\/\" target=\"_blank\" rel=\"noopener\">Downturn or Breather in Housing Market? Demographics, Inventory, History, and New-Build Sales Trends Suggest the Market in Fall will Sharply Bounce Back<\/a> by Condo.ca<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Price pressure and inventory-shortage argue against characterizing the current summer market as a \u201cdownturn\u201d \u2014 versus a short lull \u2014 in the market. While this may dash the hopes of &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2017\/08\/downturn-or-breather-in-housing-market\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"class_list":["post-6669","post","type-post","status-publish","format-standard","hentry","category-real-estate"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Downturn or Breather in Housing Market? &#8226; Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.roryc.ca\/blog\/2017\/08\/downturn-or-breather-in-housing-market\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Downturn or Breather in Housing Market? &#8226; Rory C Real Estate | Oakwyn Realty\" \/>\n<meta name=\"twitter:description\" content=\"Price pressure and inventory-shortage argue against characterizing the current summer market as a \u201cdownturn\u201d \u2014 versus a short lull \u2014 in the market. 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