Market Update - May 2023
After a 2022 of peaks and valleys, as of May 2023 it appears that the market has regained its footing. The GTA has now seen 3 consecutive months of price increases when viewed on a month over month basis. Listings are still below the norm providing for supply constraints that cannot keep up with demand. This is contributing to the price growth in the GTA housing market.
With the overnight rate held steady by the BoC, record level of immigration, big banks willingness to work with borrowers, and developers delaying launch dates (limiting supply), we should expect this trend to continue barring a curve ball.
The Curve Ball!
Inflation, which many expected to reduce to 4.1% from 4.3%, rose to 4.4%. This of course makes the BoC decision to hold rates come June 8th that much harder. The key driver in the increased rate were ballooning mortgage payments (28.5% increase!!), rent payments and fuel. This was the first inflationary increase since April of last year when we hit an all time high of 8.1%.
The O'Brien Team Outlook
The residential market has remained resilient through the last few rate increases. It is our expectation that this will hold true should another increase come on the June 8th increase. The market has been resilient for a couple reasons; 1) People still need a place to go and there simply is not enough housing in the GTA. 2) For those struggling with increased payments, we have seen the big banks extend their amortization term. This has allowed people to manage their expenses despite the BoC increase in the overnight rate.