What to Expect from the Fall Season
Rental values will increase. While the Province has already given the go ahead for a 2.2% increase in rent, those properties acquired this year will start with a raised bar.
Inventory will increase, but only slightly. And it will not be enough to dip prices. Data from years past tell us that come the week after Labour Day, we will see a bunch of listings. The problem is, there is so much pent up demand from Q2 and Q3 that they will be snatched up right away – possibly through exclusive listings.
We are going the distance, right until December. The winter was BRUTAL, the spring came late and real estate activity went right through the summer. It will continue on into the fall.
Election – Liberals will likely enact Home Buyer Incentives, including an RRSP withdraw limit from $25,000 to $35,000 and extended downpayment inventive paybacks. If the Conservatives win, there will be SOME affordability measures introduced, but likely simple tax rebates.
Downtown condos under 600 square feet will continue to be in multiple offers and see double digit growth until the spring. If we see a Conservative government, there is a possibility of an easing of OSFI rules, specifically stress tests, which will drive value even more.
Purple Bricks will move to a “no sale, no fee” model, which will likely send the company into obsolescence as it did in Australia and the United States.
There will continue to be zoning changes including laneway houses, limits to lot-splitting and small-scale developments that change with housing needs.
Interest rates will fall. European government bonds are trading at a negative rate. The BoC will cut the overnight rate and keep pace with the US, so variable will fall again. It is likely fixed rates will follow. More buyers will be able to compete.
More buyers coming to the table means more bidding wars. While I expect the $2.0m+ sales to soften, under that number I expect to remain strong. In the freehold market, if you have been hovering around staying under $1m purchase price – I predict the homes that were selling for $1m in the spring will be $1.07 by November.
There will be no crash, there will be no balance. Prices will see positive growth. And that is neither good nor bad.