Toronto Real Estate: A Buyers Market

In today’s economy, owning a home in Toronto has become a more affordable option than ever before. With low interest rates and declining prices, it’s a good time to buy Real Estate in Toronto.

Interest rates are at an all time low – the lowest they’ve been in the past 10 years and they are expected to remain low for the next year or so (and then increase by 2 or 3 %[1]). Although the current rates make home ownership a more attractive option than renting, with the bank putting tighter restraints on lending, having the ability to take advantage of these low interest rates can be a challenge. If you are a buyer with secure employment and a decent down payment, home ownership may be a viable and affordable option if you can prove to your lender you can truly afford the financial obligation.

In addition to the unbelievable interest rates, real estate is also now much more affordable than in the past couple of years. The average price of real estate in central Toronto has decreased by about 10% over the past year alone. In Feb ‘08, the average price was $522,480 and in Feb ‘09 the average was $473,991. This market change now represents a great opportunity for buyers, especially those who couldn’t afford home ownership over the past couple of years.

If you are a first time home buyer, there are a few government incentive programs that can help out with the finances. Programs such as the RRSP Home buyers Plan and the first time buyers land transfer tax rebate can offer a bit of a helping hand when it comes to down payment and costs.

At the top of the market in 2007, it was not unusual to see properties sell the day they were put on the market or to see multiple offers on one property. Today we are seeing much less of this. For the first time in years we are now seeing a buyers market (Too much inventory giving buyers the upper hand). With a buyers market, homes sit on the market for a longer period of time causing prices to fall. With the average days on market in Feb ’09 in central Toronto being 43 days[2], buyers now actually have a chance to comparison shop and truly think through their purchase. It’s a buyers market so buyers get out there and take advantage of this market.

If you are interested in buying or selling Real estate in Toronto or the GTA please contact us.

[1] Economist forecast interest rates will remain lower at least for the coming year. March 30, 2009, The National Post, SR2
[2] Market Watch, February 2009, Toronto Real Estate Board