What an amazing summer we had this year! Over 38 days of temperatures over 30°C. The good ol’ dog days of summer. But alas, all good things must come to an end. Welcome in the fall season of 2016.
In terms of the real estate market, things have pretty much remained consistent. Number of sales transactions for August 2016 reported in the TREB MLS system were up 13% percent from August 2015. Number of new listings on the other hand – down compared to last year. Strong economic forces continued such as growth in average earnings and continued low borrowing costs.
To put borrowing costs into perspective: a $500,000 mortgage carries for $2,117/month at today’s interest rate. The same mortgage at 10 per cent interest is $4,472/month. A $1 million mortgage at today’s rates carries for $4,234/month. The last time we had 10 per cent interest rates was 20 years ago and they have been falling ever since.
Also important to note, the population in the GTA continues to grow. The population in the GTA and surrounding areas have grown from 3.7 million people in 1986, to 5.5 million in 2005, to 6.3 million presently. It is projected to be 7.3 million people in 2021 and 9.1 million in 2036.
All these factors are playing a role in the GTA real estate market that we all continue to watch and examine.
During periods of record lows, use this time to pay down existing mortgages and debts as much as you can. Should the interest rates start to increase, be financially prepared to handle it. Use your equity to invest, however don’t stretch yourself too thin.
I still see real estate as a good investment. Historically, real estate investments held for long term will do you well. I also strongly believe that every property that you purchase – especially your own primary residence – should always be done with investment potential in mind. You don’t know what the future holds. We are not able to predict the market nor are we able to predict where our own personal lives will take us. Invest wisely and prudently. And get a good Realtor to help you! Words to live by.