The interest rate increases the Bank of Canada implemented in its goal of slowing inflation, had an immediate impact on the real estate market.
Yes, it become more expensive to purchase a home, yes, it eliminated some buyers from being able to qualify for financing, but the greatest impact to the real estate market was psychological.
Almost overnight it created a fear of the future. What would the impact to the economy be? What would happen to house prices in the GTA?
Whenever there is uncertainty, people decide not to decide. We saw that reflected in the April sales report. 8,008 homes sold through the Toronto Real Estate Board’s MLS System, 27% fewer than March. As I said in last month’s letter, don’t panic! Prices rose over 25% by the end of February, that increase was not realistic nor sustainable. There had to be a correction. That correction is highly area and property specific! In other words, some neighborhood’s prices corrected by 5 to 15%, in other areas the prices are the same, but maintaining stability vs increasing daily.
Well price properties are selling immediately! We have many buyers who have been pre-approved for mortgages under the old rates, they are out there looking and buying! Buyers who had been priced out of the market before, with the adjustment, are back in the market again.
Remember that old expression, “There are three types of people in the world, those who make things happen, those who watch things happen, and those who wonder what happened.”
Now is the time to take action while others watch from the sideline.
Throughout all of this, the most important factor is the professional you deal with. Experienced, a worldwide renowned company, a team that can help you achieve your goals. Give us a call, let’s discuss how now might be the best time for you to take advantage of the current indecision many people are facing.
Have a great May,
Your Friends in Real Estate.
Mark and keith
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