Each year about this time, clients start asking whether they should buy, sell, rent and how to hedge their bets. Housing decisions are not like stock market choices as they are not liquid assets and we do live in them. The uptake and change in any market is slow with lots of warnings except if you live in the Vancouver vicinity.
Christy Clark’s government enacted legislation this year that killed their market within 8 days. Sure, now it is more expensive for non-residents to buy, but what about those who were preparing their properties to sell and right-size or had sold, made commitments and were unable to close.
Here in Ontario the Liberals have said that they have no intention to get involved in a Vancouver-like tax however, time will tell. They need money, through no fault of the taxpayer.
Those in the Toronto region are in a quandary. We are a safe haven recognized all over the World for our education, and stability of Government. Our travels in the past year took members of the team to China, Delhi, Dubai, London, and the United States and at the end of each trip we came back to the most stable country in the G8. Our Canadian banking system is stable and envied around the world for foreign investors coming to Canada.
Syria, Brexit, Trump, Italian and French elections plus the demonetarization of the Rupee in India are driving more clients to Canada, and because of the Vancouver Tax and job/education opportunities to Toronto and the GTA. This will not halt unless the government intervenes or the rest of the World becomes more settled. Even higher interest rates will not deter some of these investors trying to move capital to where it is more safe, and they move cash and are not searching for mortgages.
Instead of trying to stop this investment, we must find ways to make it work for us by allowing investment when it fosters more jobs and taxes to provide services.
The other factor that could alter the market is a much-increased interest rate for those who are borrowing. However, please note that for the first few months of a rate increase we usually see some panic buying and higher prices being paid.
So at the end of the day...or in this case the beginning of 2017, what does this all mean for the GTA Real Estate market. For those hoping to see great change, don’t bet on it. At present, it is a sellers' market and as Warren Buffet is famous for saying, "sell when everyone else is buying and buy when everyone else is selling".
Our prognosis is that the market is alive and kicking and we will all have to learn to live with it unless major factors come into play. The more turmoil in the World, the better Canada and the GTA look and that means more of the same. The best advice I was ever given was, "always buy and sell in the same market". Don’t try to play the market or it will play you.