Mid January Market Report

It's that time again for my mid month market report regarding Toronto real estate. I'm sure the numbers will not come as a surprise to you considering we finished off 2011 really strong and it obviously has carried over into the new year.

Here are the numbers for the first 14 days of 2012 from TREB's report:

• 1,506 transactions reported through the MLS during the first 14 days of January, up 6% from January 2011, that's pretty strong!
• Average selling price in the 416 area is....$467,152, up 12% from the same period last year
• Average selling price in the GTA is....$444,473, up 8.5% from January 2011

These numbers indicate that the Toronto real estate market is still hot and very much in a sellers market! No doom and gloom as predicted by the media time and time again, especially with the announcement by BMO (Bank Of Montreal) of a 2.99% 5 year fixed rate, people would be crazy not to buy something and take advantage of this rate for the next 5 years. But before you get too excited about this rate, it does come with some stipulations, one of the more important ones being the amortization rate, which is 25 years and not the 30 years we are use to seeing. This may actually not be a bad thing as our banks want to prevent the same scenario that happened in the US and with a rate this low, people may think they can afford more expensive houses without thinking of the future and that's what we have the banks for.

Which leads me into my next point of discussion. In TREB's report it said that the strongest price growth was for single detached homes in the City of Toronto. The average price in the 416 area code was up by 22% year-over-year, wow!!!  What does that mean? Well considering that we have 9.2 million generation Y (born from 1977-1994) buyers, it seems like, while some of these buyers are entering into the real estate world for the first time via condos, the others are ready to move on and start families, needing more space and a backyard for their kids. This growth is also supported by our historically low interest rates, meaning people think and can, afford more then before. Clearly buyers are taking advantage of the rates, as is indicative by the numbers.

Lastly, a recent study released by Legatum Institute, which measured the world's most prosperous nations, ranked Canada as the sixth best country in the world based on criteria that have an effect on economic growth and personal well being. So if this doesn't have you convinced that Canada is doing just fine, despite all the negativity we have been hearing, then I give up! I'm not saying that we shouldn't watch what we spend and accumulate a lot of debt, but what I am saying is that we should continue to support our banks in their conservative approaches and exercise the same practices in respect to our household finances This will keep our nation going strong and prevent any housing catastrophes. The ball is in our court, so use it wisely.

What are your thoughts?