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Recesssion-Proofing Real Estate

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5 reasons why the housing market will not crash:

The two most powerful factors to focus on are supply and demand, and neither are predicted to change in the foreseeable future. Low supply + high demand = housing appreciation.

1. Lack of Supply

Due to solid lending practices, we do not have a market full of homeowners becoming panicked sellers. Globally, Canada has the worst housing availability out of the G7 countries, with 424 units per 1,000 residents. Source: Scotiabank

2. Lending Policies

Even with interest rate increases, lenders are still businesses and will come up with competitive packages to make lending solutions available.

3. Government policies

No government at any level will want to have a negative impact that stalls the market and the economy so no major announcements are expected.

4. Demand

Demand will continue with population growth and immigration. The GTA is projected to be the fastest-growing region, increasing by 2.9 million, or 41.3%, from 7.1 million in 2021 to over 10.0 million by 2046. Source: Ontario Government.

5. Employment

The job market is healthy with a 6% unemployment rate in Toronto and labour shortages in key markets.

Where are we going in 2023?

There will be increasing concerns about housing affordability, as seen with the rising trend of parents as co-investors. The Bank of Canada made the latest quarter point increase – we don’t foresee any drop in interest rates in 2023 but potential adjustments in early 2024. Finally, we expect home prices to continue to rise – particularly in markets that are attractive to millennials.

What does this mean for home sellers and buyers?

Many people were ‘holding their breath’ to see if things stabilized, but we are seeing a return to activity in the market. Buyers are realizing that the market is not going to drop significantly and sellers are seeing that their home’s value is still there. The challenge is still the availability of homes on the market. Rather than wait for the market to happen, we actively match our database of clients to those who are open to making a move to help them all get to their next home. If you’re curious to see what that could mean for you, reach out at [email protected].

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