A brief overview of several factors that affect us clearly point to a welcome calming down of this wild and sometimes unpredictable Toronto marketplace.

  • Record low interest rates, now on the way up.  Government, legitimately concerned about Canadians taking on too much household debt, are letting interest rates inch back up from all time lows.
  • More houses on the market.  We all know what happens when supply increases.
  • Tighter mortgage underwriting approval guidelines.  Controls designed to ensure borrowers can handle increasing borrowing rates are being implemented.
  • HST – One way or another, buyers of new upper end condos and houses will be paying more.

The cumulative softening impact that these factors will have is evident.

Why is this welcome?  Buyers, Sellers, and yes, salespeople, all need the reassurance of stability in our marketplace.  Stable markets also maintain a city’s affordability index.  We need both.

The increases we’ve recently seen in some of our city’s housing prices are insane.  We all know what happens to balloons fueled with reckless abandon.

Why is this softening going to be a good thing?  A calmer market will also be welcome news to qualified buyers who have been missing out on several multiple offer situations.  We’ve had two properties in our office that have recently attracted in excess of 30 offers!

Stable housing markets maintain confidence. An affordable marketplace maintains constant buyer supply.  These are win-win’s for buyers, sellers and salespeople.

Where does this lead us?  Our credibility has been under attack as of late.  If we do the right thing for our clients they stay with us and refer others down the road.  Counsel them.  Can they afford their overall household expenses if their mortgage costs were to go up by 25% or more in five years time?

Have all your buyers obtain mortgage pre-approvals at the outset of their house hunting process. If your buyers are working on existing preapprovals, have them re-approach their lender to see if this recent tightening of underwriting guidelines affects them. Keep them abreast of any market changes.  You can confidently reassure those buyers who have been missing out on multiples that more will be coming up.  Right now also presents opportunity time for sellers wanting to cash out.

You just don’t go wrong doing the right thing for your clients.

They won’t forget it no matter what happens in our marketplace.