In real estate, supply drives demand and dictates market health. For years, the GTA has benefitted from an ample supply of desirable real estate inventory. Recent events, though, including the interest rate increase and new regulations passed down by the Federal Government have led to a slight market downturn with supply being caught in the undertow.
As a bit of anxiety permeates the market, enthusiasm might wane meaning less inventory along with a higher number of people pumping the brakes in order to save more. Investment in mortgages and the real estate market should remain strong.
Predicting the Fallout
The short-term reality could be that the market will be less flooded and more competitive.
Despite this, the GTA housing market is still ripe with investment opportunities due to historically healthy returns.
Many are predicting a chain reaction where rate interests and housing prices will lead to more people staying in their current homes in anticipation of a market rebound. This is a common tactic even if it feels foreign to the usually resilient and strong GTA market.
In addition, less buyers could intensify bidding wars, meaning there’s still growth potential in the market and potential profits for savvy investors.
What GTA areas are potentially ripe for investors?
As some regions saturate or stagnate, others will present opportunity. For instance, places like Markham, King City and Aurora could experience a spike. As is often the case, people will find value in areas that are typically overlooked.
Buyers and investors should go where the homes are and find opportunity where it exists.
What does the future hold?
Even if interest rates hold at a higher rate or increase, the supply of homes on the market should return to normal levels as more people look to capitalize or upgrade. The viability of the GTA as a desirable place for young professionals and families should entice renters to consider owning and owners to contemplate upgrading, which will strengthen the market and create the supply that can meet the demand.
For now, less supply will only curtail demand so much. The GTA is still one of Canada’s more prominent real estate markets and carries promising investment opportunities.