Though not as apocalyptic as the Toronto real estate prediction of 2014, predictions at the start of 2015 were mostly on the gloomy side. Most so called experts were not very sunny with their forecasts, but some were not willing to be wrong for another year, and did not commit to a strong opinion. You see, for the past ten years or so, the real estate forecasters have started off on a gloomy note, and each time they have were off the mark.
In her book When The Bubble Bursts, Hilliard MacBeth says we were heading for trouble in 2015. She claimed there would be a real estate correction in the Canadian housing market that would correct up to 50%. Yikes!
For those not trying to sell a book with a doomsday headline, there were still some real estate predictions from reputable places that also called for some price dops. RBC, for example, had predicted a tempered 15% correction in 2015.
My own prediction, completely unscientific and based on my experience, knowledge and gut feelings, was that the market would improve, but I certainly did not expect the market to improve as much as it did.
Needless to say, whether you’re RBC, Hilliard MacBeth, or lil’ ole me, real estate predictions for 2015 have not proved to be the terrain of those in the know. As every year passes, I become more convinced that real estate is a tough thing to predict, even among those who have amassed enough data to venture a confident prediction. There are just too many variables. And 2015, like many years before, proved that Toronto real estate has risen in value year over year more than any one had predicted.
It seems that we have experienced, once again, some very strong gains in the housing and some healthy gains in most of the condo sector as well. As the city grows and houses are no longer built, there is more and more demand placed on them. So, their value really has risen the most in 2015. Houses were king again. Double digits in many neighbourhoods especially if you had a detached house. I found the Fall a little more tame than the Spring, but still very competitive. Many bidding wars and happy sellers. Some frustrated buyers too.
This past year, we saw more bidding wars and competition in condo townhomes, boutique condos and converted lofts. I really noticed a change in converted lofts where prices seem to have risen in the better conversions in high demand neighbourhoods. It seems we have fewer warehouses and churches to convert. So, we are seeing more competition in another part of the housing sector that has dwindling supply.
This year, real estate success has not been the same all throughout the country. Alberta’s oil woes have cooled prices there, but Vancouver and Toronto keep on gaining in value. Our government has tried to temper the markets, but with a gesture that will have little impact in my opinion. Perhaps an interest rate hike would cool the market, but that didn’t happen in 2015, and may not be in the cards for 2016.
For 2015, another interesting development was the success of the U.S. real estate market, which is finally rebounding from its real estate pile up of 2008. I wouldn’t say every thing is coming back in all parts of the States, but there is an excitement there among investors that this is a good time to buy because it appears that they have started the upswing from the bottom of their market.
But what does the gains the U.S. mean for us in Toronto? Well, a few things, it may draw away some of the foreign investment away from Toronto to U.S. cities. This may be a way to cool some of the prices. On the other hand, I should point out that the Canadian dollar has slipped considerably this year, and this makes our real estate a little more discounted for foreign investors from the U.S.
With 2016 just around the corner, what will be expected for the Toronto real estate market? Well, this will be subject of my first blog of 2016. I can’t promise I will be right in my educated guesses! As we have learned from the past years, real estate predictions is more art than science.