Mystery Behind the Numbers
The statistics are not telling the whole story.
There is a great deal of behind the scenes activity in the markets. Sellers want to sell. Buyers want to buy.
Everyone is waiting for that froggy moment to spring at the fly.
In constant refrain, a key factor in keeping average sale prices in Toronto from falling below $1 million has been the lack of supply. In November only 8,880 new properties came to market compared to 10,044 last year, a decline in inventory of almost 12 percent. At this point in this evolving market, Sellers are not under any pressure to get their properties on the market and sold. Most property owners in the greater Toronto area have locked into very favourable mortgage financing and it appears are prepared to wait for improved market conditions before making their properties available for sale.
Many buyers are still in the market with more than a few good semis receiving multiple offers. A good house that comes to market sells. The more expensive the house, the longer it takes to find the right buyer. The buyers who are still in the market typically have been accumulating savings for some time.
The raise of the bank rate at .5 of a point may be the painful jolt the economy has needed to cool inflation. Anecdotal evidence suggests shoppers are spending less this month, considering the season, and this new level of trepidation may be the cure.
In the past, all rate hikes were accompanied by announcements stating that further increases could be expected, and they were delivered. This time the Bank indicated that it will assess the inflation landscape in January and depending on its findings, only then decide if further increases are necessary. If the Bank concludes that no further increases are necessary at its next meeting, that will be the signal that the real estate marketplace we have been experiencing is at an end. At that time the resale market will begin to adjust.