Low prices, low rates make ‘perfect storm’ for buyers

The Toronto real estate market is a buyers’ market, and will probably remain so through the first half of 2009. That, combined with near-record low interest rates (which are expected to drop even more in the next couple of months), has created a buying opportunity like few others in the last 30 years – a ‘perfect storm’, if you will.

Keep in mind that when prices declined in previous cycles, interest rates were much higher than they are today, job losses were severe, and inflation was always a threat. It's quite different this time. Also, the basic driver of the Toronto real estate market has not been speculation; it has been first time buyers. Low interest rates and a generally healthy economy over the last decade have allowed more people to buy rather than rent. Now that the economy is slowing, the Bank of Canada has lowered rates even more, which will spur growth across the economy, and help even more buyers get into the market. That’s why I keep saying that the dip in Toronto real estate will be short-lived: a bit of stability in the economy (and perhaps a little 'stimulus'), coupled with super-low interest rates will re-launch the market.

By the way, anybody worried about the ‘investment’ aspect of Toronto real estate can just think about this: the TSX dropped 35% in 2008; the price of an average house in Toronto went UP about 5%! Even with the decline of recent months – heck, even if it ends up being 10-15 % – real estate is still a much better investment than any other option I can think of.

Call us today to make your move into the Toronto Real Estate market!