2024 Toronto Real Estate Predictions 🔮
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- Опубліковано 24 чер 2024
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Video Chapters
1. [00:00] 2024 Predictions Introduction
2. [00:29] Community Appreciation
3. [00:59] FREE Guides
4. [01:26] Prediction 1: Interest Rates
5. [02:50] Prediction 2: Sales Volume
6. [03:44] Prediction 3: Price Increase
7. [05:10] Prediction 4: Fixed Rates
8. [06:04] Prediction 5: Affordability Stagnation
9. [07:02] Prediction 6: Investor Return
10. [08:11] Prediction 7: Pre-Construction Prices
11. [08:42] Prediction 8: Podcast Subscribers
The opinions expressed herein are solely that of Tom Storey, not Royal LePage or the TRREB and should not be misconstrued as advice or the basis of an agency relationship whatsoever. Please consult your professional advisor prior to taking action on any decisions relating to the matters discussed in these videos. This communication is not intended to cause or induce breach of an existing agency agreement. This is not financial advice. - Розваги
Finally!! Great predictions! Merry Christmas and Happy New Year Tom 🥳
Thanks Tom! Appreciate your videos. Happy holidays and happy new year!
Great predictions Tom, spot on. I agree 100% with the market trends for 2024.
Agree on most of your predictions; though, interest rates are also related to the US. interest rates. I dont believe they will go in different direction, so if they keep raising, I believe it won't be any cuts in Canada
here we go, predictions, awesome
2024 = year of 1M insurance fraud fires.
Daily with paid hush money to People outside the country to commit it
Prediction 1 - Rates will drop 1-2 times then go up even more as the inflation is still really high and they are trying to pretend it isn't
Prediction 2 - More sales as investors try to unload off the high payments to rent ratio and the deals will be picked up by buyers planning to live in the units (some have over 2500/month under water).
Prediction 3- Fixed rates will average 5.25% as we will see lower rates in 3 years.
Prediction 4- Investors will be selling and sitting on money looking for new opportunities.
Prediction 5 - people will sit on the sidelines watching prices drop for most of this year and around September there will be a dead cat bounce.
Prediction 6 - Prices will start to rapidly increase in 2025 as they try to pump the market again avoiding yet another crash making the fundamental problems even worse.
I think they will cut in April vs June Tom. But these are great predictions 🙌🏾
The BOC doesn’t have a mandate to suppress or encourage home prices in the GTA. Their mandate is about ensuring inflation is at target - for all of Canada. So if the Canadian economy is in the shitter and cutting rates has the side effect of spurring GTA real estate, they will still do it
and if then economy holds up and does not go into the shitter they might not cut at all.
@@AllMyHobbies 2024 is an election year in America and everything in America is rigged so no matter if unemployment goes to zero and GDP growth goes into double digits they'll still cut interest rates.
Yep, which will spur inflation and the BoC will have to increase rates. So, it is a bit circular, since home prices do impact overall inflation. And if the economy goes into the shitter, quite unlikely rate cuts is going to spur GTA real estate, as money will be tight.
@@arethereanyuniquehandles but Toronto home prices are just one data point of inflation - there are lots of people in this city who are renters, or who already own their homes - in which case rising house prices does not lead to higher costs for them. And Toronto is just one city in the country. My point is, the BOC does not make their inflation decisions based on whether GTA prices are going up/down.
@@stephen9609 Agreed, they look nationally, but Toronto represents a large portion of the country, so closer eye on there. And some renters are impacts, since owners like to raise rents as much as they can. Ontario has some rent controls, which can somewhat diminish that.
I still think the market needs to soften a bit, 10 to 20% drop. The rate cuts are already baked into the 5 year rate, maybe even too much, so it won't go anywhere, and personally, I think the government rates should be close to 4, meaning mortgage rates should be slightly north of 5. We need a balanced market, which hasn't been the case, and we need to make housing less attractive to investors, to keep it reasonable. Not sure how you get that one, but a further price drop might help that, along with getting rid of this cheap money.
You have it backwards..... you need to entice investors to spend $$ to build houses.... the reason why prices are so high is because it is not worth it to build and then rent out and deal with the current stock of renters.
The only alternative is government funded building and that never ends well.
If the spread between price and cost was large, there would be a massive influx of 'investors' trying to take that spread.... but guess what, there ain't so there isn't.... cost to build is much higher than current price, which is why new builds is dropping off to 0 quickly with these costs/interest rates.
Cheap money didn't increase the prices, demand did. Cheap money didn't make Alberta or like 95% of Canada not named Toronto/Vancouver go up in price..... the vast majority of canada land wise went down during the low rate environment.
If you think just because you can't afford it that the prices must come down, then I have good news for Africa that the price of Porsches is gonna come down to the a price they can afford..... oh wait, that will never happen because the cost to build will always be higher than the price they can afford.
@@GreenBeanGreenBean We will agree to disagree, we need to find a way that housing costs are not such a large percentage of incomes, and that more people can get into home ownership, and not just the upper middle class and up, or those that somehow have a large pot of money.
@@arethereanyuniquehandles the way to do that is to reduce input costs (gov taxes, labour costs thru more trades schools, materials costs).... .. if you are selling computers and the price of CPUs, GPUs, monitors keeps going up and up... and your solution is to put a price cap on the computer.... did you solve the problem?? NO.... if you restrict buying to non-foreigners did you solve the problem? NO... every current solution is some stupid variation of demand curve manipulation instead of supply side cost reduction.... which indeed would create a price gap (declining costs) to increase margin and promote building to get people to own computers (houses).
the dumbest idea is to increase interest rates (and therefore cost of CPU/GPUs and then think the price is gonna come down lmao..... all that does is make the computers (houses) even more expensive and drives supply to 0.......just like it has in Van/Tor where housing starts is down 50%+ and going to 0 quickly.
@@GreenBeanGreenBean I didn't say reduce interest rates, I said more normalized rates, which should be in the 5% range for 5 year mortgages. The last 15 years have had artificially extreme low rates. I agree input costs need to change also, but that isn't going to happen without reasonable house costs, bit of a catch 22 issue though.
Not true, in my market all new starts are slowly completing and if they could go back they'd never have started. Costs don't pencil. Greenbean is right high rates will lower new construction
Respect you putting out some predictions. What makes you think rate cuts are coming? There is no economic data to support a rate cut yet. In fact the unemployment and consumer spending suggest further increases or holding higher for longer.
Most Canadian banks and Economist believe there will be rate cuts in 2024 from their forecasts. financialpost.com/news/economy/bank-of-canada-to-cut-rates-three-times-2024-economist/wcm/cf46f845-dcc5-47bc-9d3d-574e02bd37be/amp/
Tom you didn't discuss the mortgage renewals which are going to start in 2024, forcing much more sales and power of sales
We’ve discussed that in-depth on the podcast. Most banks are allowing borrowing to extend their amortization back to the beginning. It will have some level of impact, but don’t expect the market to be flooded with power of sales.
I got BMO emailing me telling me to increase payment or make lump sum payments to account for increase in IR. Can't I just not do anything and wait it out considering the renewal is in 2027?
@@radio_nowhere They're just hoping you make a lump sum payment but they know everyone is in the same boat and they can't foreclose on everyone so they'll end up foreclosing on no one. If they don't foreclose on anyone in Brampton then rest assured you have noticing to worry about.
That is correct!!
Tom, how'd you do?
I’ll check in December and report back.
Respectfully disagree with the prediction of increased sales and increased prices.
The cost to service the debt on an average mortgage is orfer of magnitude double what it was in 2019/2020. Homeowners needing to refinance cannot absorb these massive increases. The market will be flooded with product in the spring but the buyer pool is very thin. A million dollar mortgage is almost 7k/mth, +Tax/ins/maintenance and you're up to 9k. How can people afford that when 4 years ago it would have been 6k for the same exact home.
Having different opinions is half the fun of these predictions. We can check back in a year and see what happens!
My guess is a 10 to 12 percent increase in 2024 and a 15 percent increase in prices in 2025 as the Chinese gobble up everything when mortgage rates keep falling.
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People bashing pre-cons are the people saying a 2024 Lambo is the same price as a 2014 Lambo....... uh no. You are paying for the age of the building.... you might as well go buy a 1970s condo that is half the cost and more sqft.... the resale units under 5 years old are worse than the alternatives in every way. The only time a pre-con is 30% more expensive than comps is when it's just launched so gonna be built 5+ years from now.
What the people are actually saying, is that if pre-con doesn't go up, then the resale market (that they are pumping) is overpriced because to maintain that price spread of a 2024 vs a 2014 unit, the resale price must be going down..... because if both cost the same, then why you would ever buy a 2014 unit for the same price is beyond me (pure insanity).
There’s probably over 500 condos for sale in downtown Toronto that you could buy around $1000 per square foot right now. Any new building launching in those same areas would be $1600 a foot. Of course it’s going to cost more. I just think the gap is way to too big.
@@TomStorey The gap right now is big because of the added cost of inclusionary zoning/parks n stuff, and increased construction costs.... yes it is a higher gap than normal.... but it ain't because the new stuff is price gouging....it is in fact trading at a discount to the actual future cost (which is why nobody is running out to build)...just means far less supply in the future.
In your prediction for the year ahead, one of your prediction "selling activity will increase" and other one " affordability will not change " my q is that if affordability level will unchange, then who will buy houses which will increase the buying activity in toronto ?
Sales volume is impacted by quite a few factors. Interest rates are the biggest factor. But so is overall confidence in the market. I know many buyers who could afford to get into the market, but they didn’t want to because they thought prices could drop more. I get a sense from the calls I’m having in late December that people are gearing up to get into the market next year. I wasn’t getting those calls at the end of last year. 2023 was a 20 year low for sales. It’s not going to take much to beat it in 2024.
New immigrants will buy those properties
@@tansabri6146 Thanks; however, about 500k immigrants arrived in Canada in 2023, so why did they not buy a house in 2023? And you are still predicting that some of them will buy in 2024. Have you conducted a survey among new arrivals on whether they have a plan to purchase a house in 2024? Then reach out to this conclusion to make a base for your prediction; if not, you are misleading folks as you did at the end of each year, please!