Toronto Real Estate - Housing Market Outlook 2010

I attended the Toronto Real Estate Board Housing Market Outlook seminar today. We received very good insight regarding our real estate market in 2010.

Toronto is still the number one city in North America with the largest foreign born population. It exceeds other big cities such as Los Angeles and Vancouver. There is a steady 1% growth in the GTA population. A positive indicator of steady increase is in home ownership. Although the cost of home ownership will rise in 2010 due to the increase of the property tax, mortgage interest and utility cost, the average sales price has increased by 7% in GTA in 2009.

The household affordability index is still at a healthy percentage of 35%. The index is based on the percentage of mortgage/property tax/utility expenses out of the total household income.

The Bank of Canada had learnt from the late 80s and it will monitor and increase the overnight rate carefully in order to prevent inflation from occurring.

Consumers remain confident in the first month of 2010. We are also expecting the market will correct itself by having more new listings in later of the year. It predicts the average price trend will flatten going towards 2011. GTA employment will start to recover in 2010 and the unemployment rate will remain above average in 2010 about 8% while the earning trend will remain flat. Average household income will not vary much at about $90,000. The Canadian GDP has experienced a strong recovery at 3% to 4% in 2009 and will experience 2% in 2010. More than 60% of GDP is accounted for by personal expenditure on large ticket items such as cars and housings. The housing sales in 2010 will remain strong.

To conclude, we project that the sales price will continue to go up in 2010 and flatten in 2011. The number of annual sales will be very comparable to which of 2009, at high 80s to low 90,000.