A reality check when it comes to new home statistics

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We are slowing the return to the new normal, which is in many ways a more stable market

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As new home and condo sales decline from the frenetic pace of the past few years, the media is bombarding us with negative news that may cause some potential buyers to shy away from the deal. In fact, we are still busy in this industry – very busy.

In 2022, new home and condo sales were still above the ten-year average in each month from January to April. Yes, things have changed, but people will always have to buy houses.

Newcomers to Canada, people moving to the GTA for work, expanding families, empty nesters looking for more compact housing… the list of market sectors is long and active. Honestly, if there are 5 people in line for a particular house or apartment instead of 15, the news is still good.

Keep in mind that the industry goes in cycles. According to the Altus Group, in 2021 we had the second highest sales on record since 2002. We are also experiencing a severe supply shortage that makes all single family homes and condominiums so desirable that they are snapped up quickly.

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This lack of supply is, and will be for some time to come, the biggest obstacle to making homes more accessible and therefore more affordable. The recent provincial election resulted in a PC promise to take major steps to remedy this situation. Let’s hope it happens.

Meanwhile, the Bank of Canada has raised interest rates. To put that in perspective, homebuyers have enjoyed an unprecedented timeframe of historically low mortgage rates, and it’s no big surprise that they’re on the rise.

Even so, people who bought or renewed mortgages in the 1980s and early 1990s will tell you that single-digit rates are a lot more reasonable than what they went through.

Another thing to consider is that home prices are constantly rising. Altus Group statistics for April 2022 indicated that reference prices for both low-rise and high-rise residences were significantly higher than in the previous 12 months.

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There have been some price adjustments on resale, but they are not new. Choosing a new house or apartment comes with many benefits, including Tarion warranty coverage, the latest energy savings and construction techniques, etc.

If you’re waiting for the edge and think new home and condo prices are going to drop, you’re probably missing out.

The fact is that we are slowly getting to a new normal, which is a more stable market in many ways. Again, look at the big picture. The frenetic pace of 2021 could not continue—certainly not now, when demand still outstrips supply. And yet 2022 has been a good year for sales so far.

As I said above, we are busy marketing and selling homes for various clients. They are bringing communities to market as soon as possible and we look forward to seeing what else they have to offer in Toronto, the GTA and Southern Ontario.

For anyone considering buying a new home or condo, it’s important to put media reports and statistics into perspective and realize that the wise move is to buy sooner rather than later.

Debbie Cosic is the CEO and founder of In2ition Realty and has been in the real estate industry for over 30 years. Visit www.in2ition.ca.

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