When you are in the business of selling homes, the time of year often dictates how busy you are likely to be. Usually that is the case, but the 2016 Toronto real estate market is anything but typical, as record-breaking sale volumes become the norm.
The MLS Home Price Index Composite Benchmark was up by 19.7% on a year-over-year basis in October with the average selling price for Toronto homes increasing to $762,975 – a 21.1% jump over the same time period.
Holidays Typically Slower
Coming into the holiday season, one would expect activity to chill, but according to real estate agent Doug Vukasovic of Zoocasa that doesn’t appear to be the case this year.
“Typically sales will slow down over the holidays,” says Vukasovic. “A lot of people are out entertaining, going to company parties and doing their Christmas shopping. That means if people are going to buy a home it is usually put on hold. The peak season for sales is usually spring and fall.”
Aside from the holidays providing ample distraction, December rolling in also means the mercury in the thermometers plummeting, which also acts as an impediment to selling homes too.
“Winter is usually when things slow down, but that depends on how cold it is,” says Vukasovic. “People don’t like trudging through the snow to look at properties.”
No Seasonal Slowdown in 2016
We are yet to feel winter’s cold icy grip as of yet, but it can’t be too far off. According to Vukasovic, however, the current GTA marketplace means the holiday season lull may not materialize this year.
“I feel like right now is a bit of an anomaly because the market is still very hot,” he says. “Inventory is quite low, so even though the holidays are right around the corner it still is really hot. There is this pent up demand right now in the GTA, so when something is listed people are jumping on it.”
The fact of the matter is that demand is currently outpacing supply in the city, so prospective homebuyers aren’t likely to let cold weather or Christmas shopping distract them from getting the right property. That goes for both freehold houses, townhouses and condos, as Vukasovic explains.
“I was just on my way to do a showing for a condo, the property just came on the market and it’s already sold. You literally have to be out on the first day to secure a property. Bidding wars for condos were really rare before, but this year it’s almost become standard practice.”
An Unclear Future Forecast
Toronto’s molten hot market meant the federal government saw fit to act in October when it introduced new lending rules. The perceived wisdom was that this would slow sales down and bring some normalcy back to the market. That hasn’t been the case, so far at least. It means predicting where the house prices may be headed is quite difficult as we approach the end of 2016.
“Truthfully I think everyone is having a hard time forecasting where the market may be headed,” says Vukasovic. “Traditionally it is meant to be slow at this stage, but right now it’s really hot. The government has tried to implement several measures to try and slow down the market but it doesn’t seem to be working. Despite that new lending rule that came in on October 17, there still is a lot of demand out there.”