A stable Canadian economy often assures lower interest rates, laying the foundation to a steady housing market growth, and condo prices supported by consumer confidence. Great buyer incentives, such as cheaper cost of borrowing money, are often great drivers for condo prices in the GTA and Ontario.
GTA is experiencing an employment increase, as the province’s manufacturing and export sectors respond to economic demand from the U.S. While some house prices in the GTA decreased, the demand for condos ramped up second half of 2018.
The effect of an economic uplift is already taking shape as condo prices rise. According to Royal LePage National House Price Composite, The average price of a condominium increased nearly 12 per cent to $471,854 in the first quarter, decreasing slightly on a quarter-over-quarter basis by 1.3 per cent in the GTA.
The current pricing increase is driven by condo builders responding to market trends and demand, as more millennials are growing their families which naturally require larger units, and more interactive, recreational, family-inclusive spaces. Some new condos are also preparing to service the growing number of electric car owners, offering EV charging systems within condo units, and along the condominium grounds.
2018 is still in ramp-up mode, and numerous upcoming factors may damp the current positive economic outlook. International immigration along with interprovincial migration is adding to Ontario’s population growth, and may lead to a shortage of housing supply in the GTA. Housing affordability is still a concern, and a strong constraining factor to potential new house buyers, who may choose to forgo house investing.
To support the province’s natural growth, the government may continue to implement more housing policies such as the already prevalent mortgage financing restrictions. The upcoming Ontario election results may also affect the province’s future economic policies. Future young home owners may find it beneficial to vote for a party aligned with their best interest, as the GTA housing market sets the tone for housing prices within the entire province.
It will be interesting to see if the swell of summer brings the market to steadier pace, or if the GTA house prices continue to boil.