December 31, 2013 Neil warshafsky

Real Estate Market Trends 2013 – Canadian Market Value Continues To Escalate!

Market TrendsDuring the recent months, the investors have been receiving mixed signals from Canadian real estate market, as the sales volumes remain uncertain. Some experts are not so encouraging. These pundits have predicted a dangerous trajectory in the National real estate market and an over-heated purchasing scenario. Whereas the consumers and investors look more positive as the market value continues to escalate.

The ups and downs in the real estate business are measured on different levels as the market continues to outstrip the demands. Over the past year, good investment properties received a fair share above the list price due to the steady income streams, despite the downward suppression. Today, even as the Household debt weighs heavily on many consumers, the limitations of available properties, and the tightening of Federal restrictions on mortgage lending, the real estate market for both residential and commercial real estate remains buoyant.

Toronto Real Estate Board (TREB) also noticed the increase in sales volume by over 20%, but it is just mere optimism as the figures taken from the previous year were in doldrums and noted increase in 2013 is nowhere near former historic highs for transaction volumes. Market Watch indicates that the sale price of an average home has been pushed to above the $500,000 mark. The pricing for most real estate indicators ekes out marginal gains.

That said, despite flat income levels and excessively high personal debt, Canadians in general remains optimistic about purchasing real estate. Retirement is another factor that is causing a surge of investments. Small commercial real estate in Toronto deems as the best possibility with steady income flow and can be self-managed.

Most recently, the market is facing lack of duplexes in choice locations and the slowdown in retail pricing is now influencing the condominium land market. The land constrains are bolstering the condo market and many buyers now revolve around acquiring condominiums for rental purposes. Re-sale condominium apartments have seen increases of 3.7% overall in the GTA area.

Sales growth was led by the single-detached market segment followed by condominium apartments. Together, singles and condos accounted for almost three-quarters of total GTA transactions,” said Toronto Real Estate Board President Dianne Usher.

Developers have kept pricing levels flat – with a decrease of 8% per unit price over the past year – but the development fees and the escalating cost of material and labor have resulted in the reduction of overall unit sizes.

The overall picture for real estate category suggests that there has been an increase of at least 5% year over year, while the small commercial real estate still faces capitalization suppression. The pricing for small commercial real estate remains positive, at best.

Canada Mortgage and Housing Corporation predicted, “Improving employment, economic growth, and net migration in 2014 will help stabilize or support modest rebounds in housing starts in 2014 for most provinces”.

So what does this all mean? Purchasing and leasing of different type of real estate continues to escalate in the country while there has been a forecast that market pricing in the country is in for a “soft landing”. Only time will tell!

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