Written by Masoum Jalili
There’s an old Canadian song from Blood Sweat and Tears called Spinning Wheel that starts with the familiar line “What goes up, must come down.” Now that song was written in a different time, but the latest house sale numbers from the Toronto Real Estate Board echo the sentiment from that Hippy Era tune.
Specifically, they’re pointing to statistics that report an overall house sale decline of 19.5% in December being the zenith of an overall decline of 3.8% for the year. Just in case you’re thinking that these numbers are only riding the cooling down of the Toronto condo market, similar dips have been reported in that other benchmark Canadian city, Vancouver, as well.
Still it’s not time just yet to look for Toronto mortgage rates to start falling as a means to get the market back into the swing since housing prices are holding their own. In fact, average prices were up 6.5% in December capping off a yearly average price increase of almost 7%.
As a Toronto Mortgage broker that keeps his eye on the dips and curves in the markets, I wouldn’t be responsible if I didn’t point out that part of the decline in sales was part of a federal government initiative to curb the debt to income ratio for the average Canadian that has been leaning in the wrong direction for some time now.
The point here is we need to be aware a correction in prices might be in the works if the current trends continue, but that’s not necessarily a bad thing. Bringing a home or condo back within reach of some of the people who are now finding the bigger city markets just out of their reach might be what’s needed for the long term.
