The Royal Bank of Canada (RBC) recently released their research findings on the topic of housing trends and affordability. Their findings came to the conclusion that affordability slightly improved in Canada towards the end of 2012. What does this mean for the Toronto resident? What changes happened that need to be observed?
In Ontario, the real estate market had a downward trend when it came to home resales and an upward, moderate increase in home prices. The market in Ontario is defined as balanced, seeing a shift in both affordability and housing prices. Also, according to the report, “in the fourth quarter, RBC’s measures inched lower in the condominium apartment (-0.3 percentage points) and detached bungalow (-0.1 percentage points) categories. The measure for two-storey homes, however, rose marginally by 0.1 percentage points, following a substantial decline in the third quarter”. (Please read Page 7 HERE to understand how the RBC measures work)
Toronto experienced a rapid cooling off-period in 2012. The year began with great demand and need for housing, which drove up prices and and sales numbers. However, as rapidly as the market shot up, the market rapidly cooled, lowering housing prices and increased inventories. This cooling off period did give buyers an opportunity to negotiate prices even lower, some obtaining homes for a bargain of what they are worth. According to the report, however, “more recent resale data for December 2012 and January 2013 suggest that the slide in Toronto-area activity may be levelling off”.
The above proves a simple point: The real estate market has not been falling but gradually adjusting itself to make sure demand, supply, prices and all other factors are in sync. With the RBC Report (Can be read HERE), we see the market slowly levelling off, adjusting itself to current economic conditions and placing itself in a position to then tackle perhaps a possible slow and gradual growth.