With the average price of a home in the gta now over 400,000 is the Single Family Detached unit out of reach? Is the End near for our record rise in house prices and the near record low for interest rates. How does immigration play into the future of house prices?
Immigration to Canada each year is upwards of 300,000 . The City of Toronto receives the lions share of this settlement with about 175,000 new immigrants calling Toronto and the GTA home each year. Immigrants today are unlike there counterparts of yester-year they usually have more money and want to own a home right away. What does this mean well its simple… there will be demand for the Single Family Homes and Condominiums listed for sale.
With Interest rates at a record low can this continue for much longer? Were interest rates ever this low? Well you have to go pretty far back to see when rates have been this low i.e. like back to the fifeties yes the 1950′ s . Interest rates like inflation are cyclical. Rate reductions are generally used to curb any upward trend in inflationary pressure’s as measured by the Bank of Canada. The effects of rate reductions are usually felt 9mos. – 1yr after they are made.
I think there may still be some room for rate reductions by the bank of canada however like everything else they will eventually rise. To what extent we will not know as this depends on inflation rearing its ugly head.
For a more expert opinion regarding your mortgage renewal’s and rate’s seek the advice of those in the know not just those who want your business at any cost….
Source…. Rob Paterson
