Canada's Condominium Magazine
Sales in manufacturing rose to $57.1 billion in March, with economists expecting ongoing economic growth. Juxtopositioned against a now-stable housing market — where prices are reliable and inventory is reasonably healthy — makes now an ideal time to buy home or investment property.
Average prices on real estate are actually up 3.1% since the New Year 2018 — and higher on condos. Other factors, such as soaring rents — which push some buyers into the market sooner, and also encourage investors to come in for the rental income — are likely to make this a stable year with some buying demand. Two types of homes — condo apartments generally, and high-end luxury homes — are showing gains for spring.
Almost certainly, the market has stabilized. Condos remain hot and prices are still under pressure to increase on increased demand and low inventory in that niche, but overall prices are stable, and no longer subject to sudden increases. Multiple offers are less common, allowing buyers to breathe and research and approach the market responsibly. All of these factors tend to make this a good year to buy without big risk — and a decent upside for investors, if the buyer is prudent.
Inventory ratio averaged 0.46
Over the last year, the average sales-to-new-listings ratio has been stable at 0.46. It’s on the low side, but generally still indicates a relatively balanced market.
In all areas, except condos, sales are lower year-over-year — not surprising considering last year was so volatile — but prices are moving up gently, indicating we’ve likely reached the bottom of the current dip. Depending on the risk tolerance of buyers, the toe is back in the water, and the overall feeling is the bottom is reached. Less tolerant buyers might still wait and see a little longer.
Generally, buyers are coming into the market with revised expectations — not lower, but different. Many, preferring to stay close to work and the urban scene have entirely shifted from alternate choices to condo-apartment preference. Family condos are also rising in popularity. Although prices have dropped for other types of homes, new mortgage stress test rules may mean some buyers qualify for smaller mortgages.
The economy continues growth, a sizable 57.1 billion in manufacturing sales for March — up 1.4%. In February, sales topped $49.1 billion, up 1.8% against an expectation of 1.2% by economists. Manufacturing sales can be indicators of job prospects, prosperity and future growth. Whether or not Amazon lands HQ2 in Toronto, bringing potentially 50,000 jobs, the prospects in Ontario are solid and growing.
TD Bank senior economist Brian DePratto wrote: “with solid U.S. demand in the cards, the outlook for Canadian manufacturers remains healthy. What’s more, with factories running near full-tilt despite solid investment through 2017, there is a clear incentive for firms to continue building out their capacity to meet demand.”
With prosperity and growth comes housing needs, either in the form of rental or buying. With the rental market on very short inventory — and record-high pricing — the buying market becomes more attractive for both home-buyers or investors.
According to Statscan: “Primary metal sales rose 4.2% to $4.4 billion in March following a 4.4% increase in February. While the growth in sales in dollar terms was widespread, the iron and steel mills and ferro-alloy as well as the alumina and aluminum production and processing industries posted the largest sales gain in March.
“In the aerospace industry, production rose 10.6% in March following a 4.0% gain in February. The depreciation of the Canadian dollar contributed to a rise in the value of sales and inventories. Most sales and inventories held in the industry are priced in US dollars, and both are key components in the calculation of aerospace production.”
All of which, is, of course, good news for Toronto, Ontario and the Real Estate Market.