Number of Multiple offers noticeably has been reduced by half in the last few weeks in GTA market
Over the last 3 weekends in the course of my viewings, I have noticed lots of ‘open house’ signs all over town. At the same time, while I am participating in several multiple offer presentations, the overall number of offers has declined sharply to less than half of what was previously obtainable.
Meanwhile the government is in the news for its ongoing system-wide effort to find ways to cool down the crazy real estate market. It was announced on the radio that the April 19th the provincial government will announce series of measures intended to calm the market down.
In my observation, this propaganda news worked well. Sellers are rushing to close deals in order to cash out the maximum amount of profit they can before the government hits them with a series of taxes. At the same time, more buyers are holding back, waiting to see whether the series of measures will cool the market or don’t in order to shift the balance of power in the market away from sellers and toward them.
As a result, housing supply has started to increase and demand has started to decrease, the first sign of which was the steady reduction in available multiple offers to the half and then might be close to the normal level, but of course, it is not a decline in the current market price level, which can lead to an unlikely crash.
The latest news out of Vancouver, BC indicates that prices have started to pick up after a decline in price growth by almost 30% since the introduction of a foreign buyers’ tax a few months ago. Why is this? It is driven by buyers who held back and waited for the market to cool down and maybe crash, which did not happen. It is very likely that the same thing is going to happen in GTA-Ontario as soon as interest rates do not increase.
Speaking of interest rates, I agree that they should not be increased, as this could be severe punishment to the national economy. Such action is only useful as a short-term solution that might help to cool down the market for a while. What is the long-term solution? It has to do with the rapid increase of the population of the GTA and VGA through immigration.
To prove this, a recent report published by the rating agencies, Moody’s and Standard & Poor’s raised red flags on 4 nations namely, Australia, Canada, New Zealand and Sweden for their real estate market performance. I noticed that there is one factor shared by all of these nations – they are top destination for immigrants and a safe haven for capital flow in today’s world.
My advice to those who are q hold back on making a buying decision due to unprecedented bidding war situations? It might be over very soon or have minimal impact on the price growth as number of the foreign buyers is way less than Vancouver-BC. The above mentioned is totally my personal opinion, and I want a stable market for all buyers and sellers, also for agents, as it has been a very tough first quarter for all of us.
Ali Salarian, Broker, VP. Pay Per Service Realty