The price of oil has gone from $40 a barrel since Dec to below $30 a barrel. The US has actually stopped production of oil as it costs them more than $30 to pump a barrel of oil. Canada has been supplying them with oil from the Oil Patch at around $14 a barrel. There have been over 40,000 job losses in Alberta and the real estate market has taken a beating in Calgary and Edmonton. When you take away all the inefficiencies of the markets, the Canadian dollar is now trading at 70 cents and any fluctuation in the price of oil is translated directly to the Loonie.
Is it not logical that the housing market will cool off and prices will fall?
Economic downturn means higher unemployment which would lead to one thinking, who can afford to buy a home now? You have already noticed inflation by taking a visit to the grocery store where everything costs more now. Gas should cost less but between taxes and oil company margins, that ain’t happening. RBC and others raised mortgage rates even though all economic signals pointed the other way. Now the Bank of Canada has decided to hold interest rates steady in order to arrest the Loonie’s free fall.
Real estate demand is not going away any time soon in Toronto and the GTA. Here’s what I see:
– all time low interest rates means great mortgage options
– not the same unemployment scenario in the GTA vs the Oil Patch
– pent up demand with monthly inventory tracking 1.5 months to 2.5 months for Toronto and Mississauga/Oakville
– 64% of the immigrants come to Canada under economic class, which means they bring money and are ready to buy a home. GTA is a big draw.
– foreign investors love Toronto real estate as a safe haven
We are just coming into the Spring market and I have not yet seen any signs of the market cooling off or home prices dropping.
For an exact read on the supply/demand of your home and neighbourhood give me a call.