Page 8 - Best Magazine Summer Edition 2017

WHAT HAPPENED?
AN HEALTHY OR UNHEALTHY REAL ESTATE MARKET
BY FRANCISCO GARZÓN
ECONOMÍA Y FINANZAS
After a crazy first semester of 2017 with a lot of multiple offers, aggressive bids, and very low inventory; the summer market has
become more balanced and prices moderated. The forecast of how the market will perform is unpredictable, it could be extremely different for the second semester of 2017. Certainly, the GTA market is now a healthier market with the level of inventory back in its historic levels. Many people were not happy when the Government intervened with the market to avoid a potential bubble, instead of allowing the market to control itself with supply and demand principles, instead of create uncertainty. Rumors bankrupt banks! It is a true statement. But the realty is that the market slowed down, after the sixteen points ruled by the Province. It was good news but not for everybody.
Chris Slightham, President of Royal LePage Signature Realty, pointed out, “It is imperative that we reflect on long term value in order to provide
the proper context for our real estate market. It is important to remember that average home
prices in June 2015 were $639,184
(a record at that time) which means we are still up an incredible
24% in two years. The recent adjustment in sales volume and additional inventory is a needed • change to avoid what would
likely have been a catastrophic market collapse. Yes, there are some Buyers that purchased homes this year that are likely feeling the change, that may be causing tremendous stress in the
proprietary property data in 53 of the nation's largest real estate markets, showed that the price of a home in Canada increased 13.8 per cent year-over-year to $609,144 in the second quarter
During the quarter, the overall health of the Canadian economy has been a significant contributor to the stability of the country's real estate market. Canada's GDP is now expected to exceed the 2.6 per cent growth rate previously forecast by the Bank of Canada while the unemployment rate reported in May was at a nine- year low. As a result, the Bank
short term. However, as an example, if
we imply a 3.5% annual increase (half
the 36 years average) over 10 years of
ownership, you will enjoy a 50% gain in
value”. of Canada yesterday increased
“Residential real estate is not for short term speculation, it is for long term equity creation and of course simply shelter that you can call your own”
said Mr. Slightham. I strongly agree, this is the right way to understand the real estate. •
Key highlights from the National release of Royal LePage Price Survey and Market Forecast Q2-2017:
• Canada's residential real estate market posted strong home price gains in the second quarter of 2017, with the majority of metropolitan markets across Canada displaying expansionary trends. The Royal LePage National House Price Composite, compiled from
the overnight rate one-quarter of a percentage to 0.75, the first interest rate hike in seven years – a significant monetary gesture and signal of the country's economic strength
Looking ahead to the remainder of the year, Royal LePage forecasts that the national aggregate price of a home will increase by 9.5 per cent in 2017 to $617,773 when compared to year-end, 2016
September and October can be expected to be active and dynamic months for the GTA real estate market. We will see...
8 THE BEST MAGAZINE WINTER 2016 - 2017
ECONOMY AND FINANCE
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