Toronto is the leading real estate market in Canada. Though the market has had minor ups and downs in the past, Toronto's real estate market is one of the most promising and high-in-demand markets for investment in the world and will continue to be in the upcoming years. Many of the big business owners, wealthy entrepreneurs, and celebrities have invested in Toronto real estate.
Several factors affect the Toronto real estate market. These factors are constantly changing and can be overwhelming for the real estate industry. Let us look at some of these factors to see where the Toronto real estate housing market stands today.
Interest rates
The interest rate is one of the crucial factors for determining any real estate market. Especially where the lending rate of the Bank of Canada can change overnight, interest rate heavily affects the Toronto real estate market. Lenders use the lending rate of the bank when determining the interest rate of mortgages, second mortgages, house rehabilitation loans, and other house loans.
When the overnight lending rate decreases, lenders can lower the interest rates, which naturally increase the demand for the properties. When the lending rate becomes high, market prices and interest rates also become very high, which is a great problem for homebuyers. When the Great Recession hit in 2008, interest rates were at the highest peak. That time was worst for the Toronto real estate market.
Demand
Demand and interest rates go hand in hand when it comes to affecting the housing market in Toronto. When the interest rates go down, there comes a great rise in demands, as the consumers want to benefit when the market has the lowest possible rates.
The demand for housing properties also varies among the generations. It is predicted that baby boomers will continue to stay longer in the homes they have bought, while the younger generation will continue to fuel up the market space.
Population growth in Toronto
Population growth and immigration efflux play a major role in strengthening the Toronto real estate market. Around 75,000 immigrants come to Toronto every year. The higher efflux of immigrants leads to a higher population that increases the demand for housing in the Toronto real estate market.
Better mortgage rules
As the market is increasing, the prices are also getting higher with demand. Overpriced properties are not something all homebuyers are interested in. Thankfully, new mortgage rules make properties more accessible, convenient, and affordable for young and new home buyers.
Wrapping up
Whether it is through population growth, interest rate, or other factors, the demand has a great effect on home prices in Toronto. All these factors predict that Toronto’s real estate market is going to get stronger in 2020 and in the upcoming years
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