Real estate, like many aspects of life, is molded by perception and psychology
When prices begin to pick up consistently, and when demand is healthy, a feeling of prosperity and long-term benefit kicks in, encouraging more people to buy and in turn, fueling positive perceptions and emotions. When this energy runs out, people begin to hold off on purchases, sell rather than buy, and direct their focus to paying off debt and consolidating their finances. Eventually prices level off and fall. Like the stock market, sudden shifts can panic people into a negative stampede – a massive fall in prices and demand. Regardless of the real fundamentals, real estate will always be affected by perception.
Toronto Real Estate Is Still In Good Shape Despite A Rough Winter
When it comes to the real underlying fundamentals, Toronto real estate is in good shape. Tembo has repeatedly emphasized our region’s strengths and we have always taken a positive, long term view. A stable economy, a peaceful society, strong immigration, and a sense of financial and material comfort underpin the overall strength of southern Ontario and especially GTA real estate. The end of the summer of 2017 and the transition to winter marked a very intense and sudden reversal of fortunes for Toronto real estate, with large price declines and a strong fall in demand. But the very latest data suggests that the modest recovery many experts anticipated is finally beginning to materialize.
Real Estate Figures For March Look Positive
Figures for the month of March show a very modest but welcome increase in average home prices in Toronto: at just over 2%, from February numbers. The average figure is just below $785,000.00. While sales still declined just over 6% from March to February, the fall was less severe than some expected. With prices slowly but steadily beginning to creep up again and with overall sales figures declining less vigorously, the perception that the traditionally buoyant spring market will be healthy is strengthening. This is a welcome psychological change given the impact on the market of a gradually increasing interest rate environment announced by the Bank of Canada, foreign buyer taxes hitting the market, and new stress tests squeezing out riskier first time buyers.