BRIAN'S BLOG
Toronto’s 2022 Real Estate Market: My Predictions
January 21, 2022
A number of people are asking me what I think is going to happen in Toronto’s real estate market in 2022. Honestly, I think it’s far too early to predict anything specific, but in general, I don’t think there will be any major changes compared with what happened in 2021. The pundits are still predicting growth but I’m not sure it will be as robust as they profess.
Obviously, rising inflation rates, the slight pull back in the stock market and the ongoing supply chain issues cause concern and make me raise an eyebrow. Keep in mind though, if you’re a part of the group of people who were making money last year, and are making money now, you will continue to grow your wealth and there’s no better place to invest that wealth than in real estate.
Even though media outlets are reporting that the Bank of Canada is contemplating 4-6 interest rate hikes over the coming year, rates are still drastically lower than they were many moons ago. The reality is that inventory levels will remain relatively low and so will interest rates which is the perfect recipe for real estate success.
I don’t think it’s too much of a stretch to predict the condo market will continue to be strong, but it isn’t going to grow the same way the single family home market is. And, unless offices start opening up, many companies will still be dealing with employees working from home, meaning work-from-home space will be at a premium and shying away from smaller spaces will continue on trend.
Sellers will continue to be in the driver’s seat, if they have somewhere to go. Listings are at a historical low and there are plenty of hungry buyers looking for a place to call home.
If you’re a buyer, don’t anticipate a serious price correction in the future. With interest rates being still so low, properties are as affordable now as they are going to get, but you have to buy when it’s the right time for you – you can’t strategize the market. Nobody knows when the market has peaked until after the fact.
To some, the market may seem out of reach, but it’s still considered healthy. There are no signs of collapse. You won’t be getting a deal but I don’t think you’re buying at a peak or with any worries about the market going down.
If prices do go down, it won’t be just a Toronto market issue. It will be a world market issue. I think it’s still the right time to get in on the market. Rates are incredibly low and there’s no harm in taking advantage of them if you have the ability to do so.
Many people want to live in a city like Toronto and tenants are coming back to the city. The rental market has rebounded from the lows of 2020. It’s a great time to be an investor. Real estate as an investment is still one of the best ways to build wealth if you can make the numbers make sense. There’s no harm in making your money work for you while a tenant pays down your mortgage through monthly rental payments. The basic idea of investing in real estate is that you build equity as the market grows and by paying down the mortgage through the rent you receive. As a safety, just make sure you’ve got some extra money in a rainy day fund to float the property should the place be vacant for a while.
For more, Royal LePage recently published it’s take on what could happen in 2022.
I’m expecting to list a number of exciting properties in the coming weeks, so stay tuned!
If you have any questions about Toronto’s real estate market or are curious about what your home is currently worth, please get in touch!