Market Update for September 13th
Happy Friday the 13th. Ah, September. Our favorite month. The kids are back at school, the days are still warm, the nights are cool and we are all getting back into a groove. For us, September means more listing and sales activity and its time to open the floodgates for new property inventory. August inventory levels were challenging at best, but there was a sales rebound in Toronto which means house prices are rising once again. With the number of homes available for sale down by 11 % over the past year, competition between buyers is heating up again and multiple offers are once again on the rise.
Canadian homebuyers seem to be getting used to the new mortgage rules, and there have been some important changes at the federal level that are expected to help homebuyers:
• The mortgage stress test qualification bar was recently lowered from 5.34% to 5.19% increasing purchasing power marginally.
• The First Time Home Buyers Incentive (FTHBI) took effect on September 2, whereby eligible first-time buyers can get a shared equity government loan to help with the down payment.
• The Home Buyers Plan (HBP) withdrawal limit increased from $25,000 to $35,000, toward the purchase of a first home.
• Rumors of interest rate drops are circulating. Current mortgage rates can be found starting as low as 2.19% to as much as 2.89%.
The freehold sector witnessed a huge increase in new listings last week which clearly signaled the start of the fall market. There will be a weeklong lag in sales as the majority of these listings have offer dates for the following week.
The condominium sector performed similarly with an increase in new listings. Up 84% from the previous week with the centre of action being between $700K to $1.5M. While sales tapered off 10% over the previous week, activity continues to be strong with 42% of condos selling at or above the list price.