Crosstown condos and townhomes . Is there a bubble in the property market? Toronto’s real estate market has bucked the trend, with average selling prices rising by double digits in the past two months.
The average selling price of second-hand homes has broken through the million yuan mark for the first time, and even real estate agents believe that there is a “bubble” in the property market.
905 detached houses in the suburbs grew the most, with an annual growth rate of nearly 30 per cent in February. Passalis (John Pasalis) of Realosophy brokerage in Toronto said the average price of (Durham Regional) in Durham was 685000 yuan in February last year, compared with 942000 yuan this year. He said that when house prices rise by 30% a year, it is abnormal, and by all objective standards, it is a “bubble.”
Is there any risk if the market falls? (Canada Mortgage and Housing Corp.), the Canadian mortgage and housing company, and (Toronto Regional Real Estate Board), the Toronto Real Estate Authority, say this is unlikely to happen this year.
Even so, Mechel (Jason Mercer), chief market analyst at the Real Estate Chamber of Commerce, said mortgage stress tests will protect lenders when interest rates rise. Mortgage stress tests were created in 2017 in response to the housing bubble, requiring lenders to afford interest rates 2 per cent higher than bank rates.
The real estate bureau predicts that once the vaccine is widely used and migrants restart, the already tight property market will become more competitive and demand will grow further, with home sales up 52 per cent last month.
‘looking ahead, the intervention I want to see is on the supply side, so we can see a more balanced market and a moderate rate of price growth in the long run, ‘Mr. Mechel said.
In addition to low interest rates and the advice of policy makers, consumer sentiment also plays an important role in the market, says Mr Passalis. The market rebounded quickly after the initial closure of the epidemic, and interest rates began to fall, accelerating many people’s home purchase plans.
“if you plan to buy a house in 2022, but by the end of 2020, when you see house prices rising at a rate of 20% a year, you will think, I can’t wait another year, I won’t be able to afford anything,” he said. ” That’s why demand is 50% higher than last year, which is ridiculous.
Although there will be more listings in the spring, and some people withdraw from the market because they are tired of the failure of panic buying, Passallis still believes that the real estate market will not fall. ‘it ‘s different from 2016 and 2017,’he said. ‘while the rebound in downtown Bowen is driven by investors, the frenzy in other houses is not mainly because of investors,’ he said.
(John Lusink), president of Home Realty, said rising prices and sales growth were “worrying”. He is not even sure whether there will be a traditional spring transition market this year, as December and January have already been experienced.
Andrew (John Andrew), a professor at Queen’s University, said that potential sellers did not want strangers to enter their homes during the outbreak, so they delayed the listing of their homes, while demand was changing and people did not mind staying away from the workplace and having more space. This time, he said, the government has few other policy tools to cool the market.
