Buy and wait don't wait to buy & here's why.
The Toronto market is an interesting one for sure. Many of my clients ask me, can it really go higher, should I wait for prices to go down, are we in a bubble? I always tell them that it's really difficult to time any market, let alone Toronto's. The reality is, you should always do what is good for you and what you need at the time. If you are ready and qualified to purchase you should because our housing market is healthy despite whatever disrupters our Government throws our way. The latest one is the new stress test for for all home buyers, not just insured buyers.
What does this test mean? If you want to purchase a home in today's Toronto market, you must now qualify with a minimum qualifying rate equal to the greater of the Bank of Canada's five year benchmark rate (currently 4.89 per cent ) or their contractual rate plus 2 percentage points.
On the surface, this does seem as though it will affect the buying power of some families and has the potential to slow down the market in Toronto for the New Year. However, the other regulations that were put into place mainly affected the 905 areas, Toronto held strong on year over year pricing and I expect it will be the same this time around as well.
My Buyers who decided to wait are in the exact the same position they were in May. The truth is, multiple offers are yet again the 'norm' when attempting to Buy and the Sellers held onto their homes if they didn't need to sell. Now these same Buyers will have to contend with the new qualifying rules. The market may not be quite as high as the March and April prices this year, however, if they don't buy now before the new rules kick in, they truly may be out of luck in Toronto in the New Year.
I have always believed, if you are ready to Buy then do it! There will be ups and downs in any housing market but in the long run, you will always be ahead. Buy and Wait, don't Wait to Buy!