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We’re not re-inventing the wheel as we’re sure you’ve already heard some of these predictions over the last couple of months. However, do you really know how they will affect you if you are a buyer or a seller in 2019? The recent Bank Of Canada decision to hold rates at their current rate of 1.75% is good news for buyers right now as this means a continued path towards a more balanced market in 2019. However, the Bank Of Canada is forecasted to increase their overnight interest rate two more times this year, which would bring it to 2.25% and banks will follow. Buying a house in 2019 certainly won’t be getting any easier, and we aren’t expecting a significant change in the market between 2018 and 2019. However, across the GTA, highly sought after neighbourhoods, such as Bloor West Village, Roncesvalles, The Junction, Mimico and many other central and east end communities, continued to see strong activity last year and we expect to see the same this year.

WEST END MARKET PREDICTION FOR 2019:

  • A fairly healthy Spring market is ahead in Toronto’s desirable west end neighbourhoods
  • Homes under $1.2M will continue to be in high demand as condo move up buyers take advantage of their equity (in case you haven’t heard: condo sales have been skyrocketing the last few years)
  • Homes over $1.5M will see a slow-down of activity and an increase in days on market (we had a taste of this in 2018)
  • Buyers will be pickier. If the home is lacking something major like parking or location it may take longer to sell or see a less desirable sold price
  • You will continue to see multiple offer scenarios in condos and ‘desirable’ homes under $1.2M
  • Astronomical bidding wars of 10+ offers are unlikely. The realistic number of offers on well-priced, desirable homes will most likely sit at around 2-4 offers.
  • The fear of the unknown in the market will continue to be a factor and affect buyer confidence.
  • The gap between semi-detached homes and detached homes will remain lower than in recent years, allowing for a more achievable upgrade to a detached home.

WHAT DOES THIS MEAN IF YOU ARE A SELLER?

Be cautious when pricing and under listing your home for sale:

The common tactic of “significantly” under listing a home for sale may affect your bottom line.  Since prices are expected to see a modest increase and buyers are being cautious and much more selective with their home purchases, they won’t be so keen to pay massive amounts over list price, on principle and the fear of the property not appraising before closing.

Homes won’t sell themselves. 

Strategy, marketing and staging will play a huge role in the success of the sale in 2019. Why? Because buyers are more selective and have increased their wish lists. If you want a profitable and successful sale, your house will need to be prepped and ready, priced right and backed by a strong marketing strategy.

The market isn’t expected to improve anytime soon. 

Forget about what your house could have sold for in 2017. Those Days are over. It may be several years before the market improves to that point. Waiting may actually cost you more money in the long run. What if the market dips again, or you have unexpected and expensive home repairs? If selling your house is the right move for your life right now, just do it. Sell and forget about what could have been.  If you can buy and sell in the same market you are in good shape.

WHAT DOES THIS MEAN IF YOU ARE A BUYER?

It’s a great time for a size upgrade.

Whether that’s a move up from a condo or a semi to a larger home, the gap between a starter home and a dream home is smaller than it’s been in years. Depending on your financial situation, skipping the in-between house, (condo or semi), if the ultimate goal is detached, may be wise. If there’s a way to avoid the in-between house, strongly consider it. Moving between homes will typically cost you in excess of $80,000.

It’s no time to slack off.

As a Toronto home buyer, you need to be well prepared, both financially and emotionally to successfully buy a home. In desirable neighbourhoods across the city and the west end, multiple offers are still part of the buying process and you need to have your ducks in a row early.  The research phase is also a critical part in the home buying process and will give you validation that you found the right house and the confidence to proceed with an offer.

Home prices are still going to rise.

This means that if you absolutely love a house, you should consider offering a little extra ($10-$20K) to win the house. When a home sells, this sale price typically becomes the new price benchmark. This means that next time you offer on a house in the same or nearby location, you might be paying this ‘little extra’ regardless.

Buying a house should be a long term commitment.

Unless you are a savvy flipper (but even then it’s a worry these days) or investing into a super desirable condo, the length of time you should hold on to your new home is at least 7 years. You probably won’t be underwater if you sell in 5 years, but you won’t gain enough equity for a significant upgrade. In today’s market, a profitable investment will require more time, which is one of the reasons why today’s buyer is being more selective in their purchase.

 

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