The interest rate increases the Bank of Canada implemented to slow inflation immediately impacted the real estate market.
Yes, it became more expensive to purchase a home. Yes, it eliminated some buyers from being able to qualify for financing, but the most significant impact on the real estate market was psychological.
Almost overnight, it created a fear of the future. What would the impact on the economy be? What would happen to house prices in the GTA?
Whenever there is uncertainty, people decide not to decide. We saw that reflected in the April sales report. 8,008 homes were sold through the Toronto Real Estate Board’s MLS System, 27% fewer than in March. As I said in last month’s letter, don’t panic! By the end of February, prices rose over 25%; that increase was not realistic or sustainable. There had to be a correction. That correction is highly area and property-specific! In other words, some neighbourhood’s prices corrected by 5 to 15%, in other places, the prices are the same but maintain stability vs increasing daily.
Well-priced properties are selling immediately! We have many buyers who have been pre-approved for mortgages under the old rates; they are out there looking and buying! In addition, buyers who had been priced out of the market before, with the adjustment, are back in the market again.
Remember that old expression, “There are three types of people in the world, those who make things happen, those who watch things happen, and those who wonder what happened.”
Now is the time to take action while others watch from the sideline.
The most crucial factor is the professionalism you deal with throughout all of this. Experienced, a worldwide renowned company, a team that can help you achieve your goals. Give me a call, and let’s discuss how now might be the best time for you to take advantage of the current indecision many people are facing.
Have a great May,
Your Friend in Real Estate.
Don’t forget; I’m never too busy for your referrals!
Steven Maislin, ABR, SRS, SRES, IRES, RENE, Broker
ABR: Accredited Buyer Representative
SRS: Seller Representative Specialist
SRES: Seniors Real Estate Specialist
IRES: International Real Estate Society
RENE: Real Estate Negotiation Expert