What is happening in the GTA and Southwest Ontario Real estate market? The market is in a massive Shift for most areas in Ontario. The only area spared right now is the central core of Toronto.

All real estate "shifts" follow a predictable pattern.
1.  First transaction volume drops.

2. Listing inventory increases

3. Prices fall

4. The decrease in prices is accelerated by higher interest rates as large swaths of the population no longer qualify.

Real estate recessions usually start 18-36 months before Economic recessions. For example, the U.S real estate market started to recede in 2005, 2.5 yrs ahead of the 2008 recession. The GTA market started to recede in February, followed by rest of Ontario in April…
The four Economic indicators that you have to watch are :

a) Unemployment 

b) GDP 

c) Inflation 

d) Interest rates.


Unemployment - Most recessions are preceded by low unemployment, like today.

GDP - people are buying a lot of stuff, at higher prices, due to supply chain issues and "price gouging'. This causes inflation.

Inflation - inflation affects the working/dependent class more than wealthy people. The problem is that inflation kills a democracy. Just look at the protests around the world against governments’ loss of control on inflation. Nothing like a good threat of "pitchforks' to spur on the Central banks.

Interest Rates - Central Banks must raise rates and "kill" the real estate market, car sales, durable goods, etc. Governments like low inflation numbers so they do not have to give large cost of living wages to their workers. The private sector likes it, too!  Will a 5-year 5.50% mortgage rate cool the market? No. Which is why the rates may have to go up to 7%+ to have a substantial impact.
At the current rates, a family making 95k a year now qualifies for $415,000 mortgage. 6 weeks ago the same family qualified for a 500k mortgage. This is a drop of 20%, and that is why prices always drop as interest rates rise. Expect prices to fall, but don't kid yourself that you will be better off if you wait.
Affordability = Price of the home + the cost of money (to carry the mortgage). Our clients may be “waiting for the market to crash” as they so eloquently tell me day in and day out. The problem with this strategy is that it fails to factor in the rising rate environment … 

🤯For example - Did you know that you will pay the bank less at a 3% mortgage of $800,000, than you will having an 8% interest rate on a $ 560,000? 🤯
Is now the right time to buy for our clients to buy? The correct answer is that it depends. It depends on the time you are planning to hold the home, your job security, and your confidence in the future.