Photo: James Bombales
Strong population growth and demand will keep the GTA housing market hot, pushing the average home price up 17 per cent higher in 2017 than in 2014, according to Central 1 Credit Union. The pressure will spill over into neighbouring cities such as Hamilton, which will likely experience a boost in demand from commuters looking for a less pricey place to live.
In their Economic Analysis of Ontario, the credit union pointed out that sellers in the GTA haven’t been too eager to put their homes on the market lately, which has contributed to declining inventory levels since early 2013. The lack of supply is anticipated to drive the average home price in 2015 up 6 per cent to $608,000 (in February, the Toronto Real Estate Board reported the average price at $596,163)
Central 1 has made fairly dramatic predictions before. In late 2013, they suggested home prices in the city will double over the next 25 years.
New listings will eventually outpace sales according to their recent analysis. By 2016, greater supply is expected to slow price growth to 5.4 per cent a year and 2017 is anticipated to see a 4.5 per cent price boost.
Booming condo construction has been a cause for concern among some real estate analysts who believe it will lead to a glut in the market. However, Central 1 is predicting it’s unlikely there will be a down-turn in prices as growth in completed and unabsorbed inventory was modest at the start of 2015.
“Fears that new condos are being purchased for flipping is unfounded with MLS new listings stable and active listings still trending lower in early 2015,” said the credit union in their report.
The only thing that will cause a drop in prices would be a recession, such as the ones experienced between 2008 and 2009, 1990 and 1992, and 1981 and 1982.
Since there don’t appear to be signs of another economic recession in Ontario in the next three years, Credit 1 believes prices will hold steady, “though the unexpected may happen.”