The start of 2010 brings with it the opportunity to set ambitious new goals for the year and even the decade ahead, particularly in light of the market’s fortuitous recovery in recent months.
In December, the real estate market continued its strong pace with the sale of 5,541 single family homes, bringing the 2009 total sales to 87,308, a 17% increase over 2008 and representative of a very healthy market. The average home price rose by 4% in 2009 and ended the year at $395,460.
2009 started off very gingerly for investors and home buyers as the slow markets in the United States created an atmosphere of doubt and fear in the Canadian economy, and the resulting postponement of home buying decisions. By April, those concerns proved to be unfounded and our real estate market soared as buyers flocked to buy real estate and that pent up demand resulted in bidding wars for homes and price increases.
The new Harmonized Tax (HST) tax will add several thousand dollars to the cost of buying and selling a home after July 2010 and an increase of 7% 0n the sale price of new construction homes and condominiums. The government has indicated that there will be a period of time where the tax will be graduated for home under $400,000, but the bottom line is new construction homes will be increasing by 7%. That will drive more buyers to resale homes and cause those prices to increase as well. July, August, September sales should be a little slower as people get used to the new tax and buyer demand builds up again. All in all, it is a great time to buy NOW! We are in the winter market, and once the snow melts, there is going to be greater competition for housing and a limited supply always means higher prices. If anyone is remotely thinking about real estate, now is the time to act.
Interest rates remain at historically low levels, offering continued affordability in the market. Although Ontario’s unemployment rate remains high at 9.3 per cent, even this sector is beginning to show signs of improvement, with November experiencing the largest employment increase in our province since September 2008. As well, with nearly 100,000 newcomers arriving in our great city every year, immigration is another factor that makes an important contribution to the market.
Provided that these three key conditions are favourable, we should continue to experience a robust market throughout 2010. Homeowners will also react to the strong sales and price increases seen in recent months, resulting in a much-needed increase in inventory. Many may also undertake transactions in the first and second quarters of this year to avoid increased costs associated with the harmonized sales tax, which takes effect July 1st. First-time home buyers may have even more incentive to get into the market as Federal Finance Minister Jim Flaherty recently alluded to potentially tightening lending standards in the future.
If you have any questions or concerns, please give me a call, I would be happy to answer all of your questions.
I would like to ask you for a favor in return. If you know of anyone thinking of buying or selling, please let me know, I would love to help them, and as your friend I will take extra good care of them.
Best wishes to you and your family and may 2010 be a Majestic year for you!
Your Friend in Real Estate,
Sunny Batra, Sales Representative
Re/max Realtron Realty Inc.
Office: 416 289 3333
Fax: 416 289 4535