Mortgage Market in Toronto
Toronto’s residential real estate market is as large and complex as the city itself. Depending what you read, Toronto’s population is larger than Chicago’s or well on its way to being the fourth largest city in North America. Such growth creates real challenges and opportunities for those working with Toronto mortgage brokers going forward.
Focus on Toronto
Toronto dominates the Golden Horseshoe that wraps tightly around the western curve of Lake Ontario. Trying to distinguish Toronto city from its overlapping neighbours, it makes sense to stay with the city boundaries.
Mainly looking to the CMHC outlook, the numbers show the struggle to recover from the economic slumps in recent years. Given this, CMHC predicts a 1.9 per cent increase in growth for 2016 and again for 2017. And, that growth should reduce unemployment to 7.5 per cent, a slow but steady decrease since 2012’s 8.5 per cent. And, working people contribute to a buyer’s market.
Toronto’s statistics list 1,422,280 jobs. The same numbers indicate an aging population, a housing stock, and a steady increase in international immigration. An increase in population and significant change in the demographics presses Toronto planners to manage the housing mix and market.
Defining a market
According to the CMHC:
• Housing starts will hover around 35,000 into 2017.
• Condominium sales have been robust since 2014, and they make a market preferred by millennials.
• New condominium starts will outnumber apartment starts, so vacancy rates will remain tight.
• Developers have completed approximately 14,000 condo units a year since 2011.
• Townhouse starts should exceed 4,250 units.
• Mortgage rates are expected to increase late into 2016.
That leaves the sales of existing homes to influence the market. Pressures arising from the movement towards core city housing, the movement of immigrants into low end housing and rentals, and the temptation of some home owners to move towards other more affordable nearby cities have defined the housing market. The CMHC assessment finds that there is no evidence of overheating, overpricing, overvaluing, or overbuilding. That makes for a healthy situation that generally favours the seller.
Toronto Mortgage Brokers
The sales volume for existing detached homes remains steady, and that turns raises prices. City News puts the median value of single detached houses sold in June 2016 at $1,280,000. It is a good idea to understand the role of mortgage brokers serving Toronto in offering advice, and what benefits they can provide vs. a bank within such a dynamic housing market.
Whether people want to buy, refinance, or secure a line of equity, they need professional and independent advice. This mortgage market in Toronto presents unique challenges for mortgage brokers to overcome. These challenges demand innovative and experienced response well beyond the scope of most home buyers. They offer the skills to match customer needs with what they can realistically afford. And, they pull together lenders and structure deals that put customers where they want to live.