Isn’t it interesting how there was so much buzz around the benchmark increasing on June 1st? “Stress test is changing”, “it will be harder to buy”, “the market is going to slow down”, “market is going to crash after new changes to the stress test”.
Heard it all! And guess what happened….it came and went just like that!
See also: Why Does Toronto Have the Most Construction Cranes in North America but 65,000 Empty Units?
We saw a minuscule slow down in certain micro-markets for about 14 days. Then everything picked back up. Are we seeing 50 offers as we did back in March 2021? No. But we are still seeing homes go above asking and with multiples offers. The slow down really wasn’t because of the stress test changes. It was because of the surplus of inventory coming to the market. There were more options (not by much). More competition for sellers. Plus the factors of things opening up, vaccination increasing and condo buildings becoming a thing again.
This is all not to say the benchmark increase (stress test) did nothing to the market. Numbers are showing that around 5% of buyers in Ontario were affected. Their buying power went down. Guess where they have gone? Condos.
We have a lack of supply. That is all. Immigration per year for 4 years will increase on average by 400,000 in Canada. If 25% of those people came to the GTA, that’s 100,000 new citizens. If 10% of those people bought that’s 10,000 homes/condos. Where are they all going to buy!?
That’s our reality check/keeping it real update for you. The GTA real estate market is not dead. Government implementations will create a slowdown – but not for long. We need supply!
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Featured Image: Narciso Arellano
