Do you buy now, or later? That is the question of the century. When it comes to real estate, it is the number one question we ask ourselves. Especially now, it can be difficult to know if it’s the best time to invest in a property. Here is our outlook on the Toronto real estate market in 2021, and predictions for 2022.
Let’s start off with knowing that it’s all relative to your individual situation.
What could be coming in 2021:
Interest Rates Going Up
Although interest rates have stayed relatively low in the first half of 2021, you never know when a hike up could be coming. Especially during uncertain economic times.
Lack of Supply
This has been an issue in the GTA for as long as we can remember, and it only gets worse every year. With universities accepting a higher number of students, and large companies opening up headquarters in the GTA, our lack out housing supply keeps climbing. Any properties on the market are in high demand, driving up the prices as buyers battle it out to get their offers accepted.
Even if only 10% of the projected 400,000 new immigrants were to buy a home, that’s a lot of homes being purchased with no property sales to compensate. This is definitely a factor when it comes to availability in the GTA.
Back to Work Offices
Working from home and moving out of the city for more outdoor space was all fun and games while COVID kept us closed. As offices open back up for in person work are those city lovers going to come back into the core?
What could be coming in 2022:
The policy is to establish a 1% Vacant Property Tax on the value of residential properties that are unoccupied for more than 6 months in a calendar year (does not have to be a continuous period of 6 months).
With the Canadian government targeting to have over 400,000 new immigrants enter Canada per year over the next few years one can only imagine the toll that will have on already low inventory of available housing.
New Government Housing Policies and Initiatives
The government is constantly adding, removing and changing various housing policies and initiatives. Keeping informed about this can help in speeding up the process to home ownership. Check out the Current First Time Home Buyer Initiative to stay up to date on policy.
So, What Does this Mean to You?
If you’re looking to buy real estate in Canada, do it when you can. Don’t wait. It will be more competitive as immigration increases, international students come back for school, international companies continue to put down roots in our cities and with things going back to ‘normal’ the attraction of living in the GTA increases. 2021 will continue on it’s strong path, with a soft landing in 2022. Interest rates increasing, vacancy tax, immigration and these “potential” changes from the government it will be interesting to see what effects they may have in 2022.
We say this at the beginning, middle, and end of every piece of advice. Your response and how you deal with purchasing a home in the GTA will vary based on your individual situation.
Reach out to us! We’d love to help create an individual plan with you for your home buying journey.