Although prices for Toronto real estate properties in the market have been increasing, the housing demand has not changed and has consistently risen despite the price changes. However, reports indicate that these are signs of 'risky' levels, especially when it relates to the improvement of the city.
As reported by Huffington Post, the Toronto real estate market has exuded a low interest count over this second quarter. In fact, as compared to other parts of Canada, it is distinct from their values as increases in interest rates have been stagnant in place such as Vancouver.
Furthermore, prices for properties are expected to continue rising in the short term since there are tight supplies of detached homes for sale.
This led to the realization that there will be a decline in Canadian borrowing rates for real estate property during the first half of 2015. Yet, consistent increases in real estate purchases in Toronto have not declined. Although this may normally mean good news, the result may be the opposite.
According to CBC, housing affordability in Toronto is starting to become too 'risky'. Although housing affordability has been rising, it does not directly relate to the sought after improvement of the city.
This is due to the fact that when the Canadian dollar fell last week, some foreign investors are taking up the opportunity at buying more real estate in the city, making it a non-neutral market for the locals. This meant that the Toronto locals should not count on affordability of homes to improve their city.
This is so because affordability in homes in Toronto are being linked then to the historically poor levels that the city experienced during the 1990s, the housing bubble period.
With a strong labor market, a stagnant inflow of migrants and low interest rates affordable to home buyers in the region, it might not take too long before the affordability of the Toronto real estate overturn and affect the steadiness of the market because the prices are 35% overvalued.
