By: Michael Tough Realty Group

March 2019 Market Update

Tags: March 2019 real estate Market Update

 Welcome to Spring!!

As I sit and write this month’s market update, the sun is shining and the temperature is moving toward a positive double digit. I am sure, like me, you feel a greater energy and enthusiasm. Summer will be here before we know it!
I have watched this First Quarter with great interest. A lot of water has gone under the bridge since government intervention caused confusion in the market place:

Two Significant Events on the Horizon

A Federal Budget will be introduced on March 19 – an election year budget. Safe to assume this budget will be packed with incentives and enticements to encourage a vote for the current party. Politics aside, I am curious to see what Mr. Morneau rolls out as it may apply to the housing market. The current OFSI stress test, as an example, causes the average buyer in our trading area to have to qualify at $900 more per month for a single family detached home than the actual mortgage payment would be. Not sure about you, but not a lot of families have an extra $900/month sitting idle.
For me personally, the current OFSI regulations are the single biggest contributor to our sluggish market. I absolutely agree that action was necessary at the time - when it was believed that the Bank of Canada would commence an upward trend of interest rates. Unfortunately, the economic impact of moving rates higher has caused the Federal Bank to re-think its policy and we are now likely back to steady or declining rates. Is an OFSI stress test even necessary any more?
Within weeks of the Feds reading a budget in Ottawa, Ontario will introduce its first full budget under this current government. On April 11, we shall see what bag of goodies Minister Fedeli presents to us. The first several months of the sitting government has been tumultuous.  It will be interesting to see how the Ontario government balances their tax cut promises with an obvious necessity of maintaining public funds in some very hard-hit sectors. Of interest to the real estate world will be anticipated changes to the 2017 Ontario Fair Housing Action Plan; and revamping of Real Estate regulations regarding bidding wars and Multiple Representation. This will be an interesting budget for sure!
 Both Federal and Provincial legislation have taken a toll on the markets over the past two years. I am not disputing action was necessary. Just not sure a sledge-hammer was needed as opposed to some prudent short-term relief. As indicated in the image below, 2018 was the single biggest decline since 1995. The clear indicator that legislation went too far.

House prices overall have continued to trend down in most of our trading areas. If you note the yellow line in the image above, it clearly illustrates that home prices remain significantly above a ‘healthy housing market’ trend line. This does remain a concern, however with interest rates incredibly low, affordability is improving.
For our market, the good news is that the buyers are back. We are seeing increased activity in the market and what appears to be a renewed sense of stability. Truly a great home buying opportunity exists across most or our trading area; and our team is seeing an increase of interested home buyers and sellers contacting us to discuss next steps in this market.
We look forward to the opportunity of helping you interpret the data and make the very best Real Estate decisions. Give us a call, email or send a quick text to one of our Team. We are committed to coming alongside and advising you what the next steps may look like for you and your family.
And enjoy the sunshine!


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               Saturday, March 16, 2019 5 – 7pm

Stronach Aurora Recreation Centre 
 Toyota Arena

1400 Wellington St East, Aurora 

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