Toronto Buyers Tread Cautiously into Fall Housing Market

Real estate buyers in Toronto appear to be treading more cautiously into the fall market – especially compared with the excessive bidding that took place in the city last spring.

Chander Chaddah, a real estate agent with Sutton Group-Associates Brokerage Inc., listed two houses recently; one sold on offer night and the other didn’t.

The one that didn’t sell is a three-storey semi-detached house on Wright Avenue in Roncesvalles Village.

The house, which has an asking price of $1,249,900, is the type of large, renovated family home that often attracts a crowd of bidders, he says. There’s a high-end kitchen with an eating area and doors opening to a deck. The owners also enlarged the lower level in order to build a media room.

“The offer date came and went,” he says, adding that several other houses in the same area remained on the market after the official deadline for bids. It’s an area where buyers often do battle and listings are relatively tight.

Diana Petramala, an economist with Toronto-Dominion Bank, says some of the momentum has come out of the Bank of Canada’s interest rate cuts, which fuelled so much of the buying in the spring.

The central bank trimmed its benchmark rate in January and again in July. The decrease at the start of 2015 caught market watchers by surprise and ignited the markets in Vancouver and Toronto.

Ms. Petramala points out that five-year fixed mortgage rates have not fallen in recent months. But, since rates are already hovering at historically low levels, the risk is to the upside, she adds.

Looking ahead, Ms. Petramala expects a few more months of above-average activity, then the lagging effects of the economic slowdown will likely catch up with the housing market.

Reference: The Globe and Mail

http://www.theglobeandmail.com/…/toronto-b…/article26605437/