Every year, we like to predict what’s going to happen in Toronto’s real estate market. This year, I asked Brendan, Mike and Kristin to tell us what they think will happen:
Brendan’s Crystal Ball Predictions for 2016
2015 was mostly a Seller’s market and honestly I don’t see things changing much in the first few months of 2016–I know many many unsatisfied buyers who went to bed at the end of 2015 without a home in their bellies, and who are going to wake up in 2016 hungry and poised to pounce on the first good product that comes along. If I had something good to sell I might be tempted to be the first one to market in January…I predict it will be like that first deer that wanders out among the hungry wolves at the end of winter….
I also predict that some hotspots we have been talking about for years are about to get a lot hotter. My faves?
Even the industrial corridor north of the railway along Geary Ave has been undergoing a hip-ification, starting with places like Kitch and Geary Lane, and of course including our favourite brewers at Blood Brothers Brewing.
Here is a link to the City’s Dupont Street Regeneration Study
Factoid: the Galleria Mall first opened the year I was born. Although the reinvention of the area around the mall will take years, Lappin Ave where we stopped clients from buying only a few years ago, is now pushing the million $ mark…although it will be a few years before reality catches up to those speculative buyers.
Mike: 2016 Will Be the Year of the “Handy-Man Special”
You’ve seen them before, “Handy-man special”, “Renovator’s delight”; “great for first-time home buyers”. Why have you seen these taglines over and over? The simple answer is price point. Working with a lot of first-time home buyers and buyers stepping up from their first condo to their first freehold property, the sub $600,000 home is in demand.
Drawn in by the price and, for whatever reason, agents not allowing Joe Public to know when the offer date is, you thought you had a chance at that detached home that needed “some work” and was a 2 minute walk to the subway listed for $535,000. The truth is, it was always a $600,000 home. So why do the handy-man specials almost always include a phrase “great for first-time home buyers”? Majority of the buyers in this price range are first timers. I did a 2 minute search in the East-End starting at Broadview over to Victoria Park. I used Mortimer Ave and Gerrard as my North -South boundaries. The average listing price of a 2 bedroom property this past year was around $560,000. The average sold price? $606,000. Did you ever have a chance at these houses? Maybe. You were competing for it against actual contractors and renovators or buyers that had the funds to be able to fix up the kitchen and washrooms. As the price point for move-in ready houses along the subway line increase, fixer-uppers will be in even more demand by renovators because they know that with a renovation they are worth substantially more.
The other factor that will push this price point higher for most buyers is the new 10% rule for mortgages over $500,000. A lot of people are desperately scraping together a down payment to get in before February 26. There are still a few areas in the East that are affordable on the subway line. Unfortunately, they are not going to be in your dream neighbourhood. Those nieghbourhoods will become gentrified. Just think of how Woodbine and Danforth neighbourhood or the Junction were thought of several years ago.
Kristin: The Condo Market Will be HOT!
The downtown condo and loft market is was hot in 2015 and my prediction for 2016 is that it is going to get even hotter. The expected December slow down didn’t happen this year and I am now even busier in January.
You can expect to see multiple offers as Buyers compete on unique Toronto lofts and condos in really good buildings.
I also predict that Cityplace West (west of Bathurst) is going to be an area to watch in 2016. With the new buildings on Bruyer Mews, Grand Magazine, easy streetcar access and new commercial spaces starting to fill up with retail, I expect that the area will be just as bustling as its neighbour to the east.
I can’t wait to see what comes on the market over the next few weeks. With the milder winter we seem to be having, my prediction is the spring market will come alive even earlier in 2016.