The Conference Board of Canada has just published a report that shows that affordability for people buying condos in Toronto is the best since 1999!
Affordability was measured as the percentage of household income spent on a mortgage for the average priced condo. By the first quarter of 2009, it was down to 13%. The high in 2007 was 17%.
Besides lower condo prices from 2007 – about 7%, interest rates have fallen even more. Today mortgage rates below 4% are common, regardless of the term. Compare that to 6 and 7% just over a year ago!
Potential buyers have been holding off because they want to hit the bottom of the market – well it passed them by. February was the magic date. It’s amazing that more people want to buy when prices are rising rather than when prices are falling. It is human nature. But for people who know real estate and who invest for the long term, you always buy when prices are falling because the long term trend is always upwards – at about 3% per year plus inflation and you make the most when you can buy below the long term trend.
Anyone else share these views?
Tags: condos in toronto
Toronto has a well diversified employment market with the number of jobs in finance, insurance, professional, scientific and technical services out numbering those in the manufacturing sector. Toronto has also experienced strong employment levels with unemployment levels at about 6.8% in 2007. This diversified labour market is less susceptible to widespread job loss than surrounding suburban cities..fake rolex watches
I agree. The economic fundamentals suggest that Toronto real estate prices are very reasonable, no matter what comparables you use – other Canadian markets or other world cities.
Hello from CondoCatch.com!
In a recession, decreased demand will decrease prices and increase quantity demanded back to the pre-recession levels (i.e. increased sales figures in June), which is what your evidence suggests. However, when we were aggregating data over the last 6-months at CondoCatch.com, we noticed that the vast majority of projects have pushed back occupancy dates. Developers are essentially decreasing today's supply of condos to sell at tomorrow's higher prices. How long do you foresee condo prices remaining low? Also, do you think longer-term projects (occupancy dates of 2012 and after) that offer deep discounts make financial sense for the buyer?