2019 Real Estate Market Interest Rate Predictions

2109 Real Estate Market

2019 Real Estate Market Interest Rate Predictions for Toronto and the GTA

2018 was an interesting year for the real estate market in Toronto. Sales prices decreased by about four percent, with new, stricter mortgage approval conditions and rising interest rates being the main contributing factors.  Additionally, new provincial legislation that increased taxes for foreign buyers is likely also partially to blame. With this past year being categorized as mediocre, there is a lot of uncertainty concerning how the 2019 real estate market will perform, particularly in the face of continued rising interest rates. While nothing is ever guaranteed, my time as a realtor has given me great knowledge about this ever-growing, ever-changing market. Today, I’ll share some of my interest rate predictions for Toronto’s 2019 real estate market with you so that you know what to expect when to buy, and when to wait. However, I strongly recommends to consult with your Mortgage Broker or Bank to discuss all of your mortgage options

The Negative Side-Effects that may come with Rising Interest Rates for the 2019 Real Estate Market in Toronto

After remaining fairly steady and reasonable in the past few years, the Bank of Canada began to increase mortgage interest rates in the latter half of 2017. There’s little doubt that interest rates are going to continue to rise in Toronto’s 2019 real estate market. It is going to be particularly difficult for millennials to afford a place to live, even in previously reasonably priced areas like the Durham region. For the majority of prospective home buyers, however, purchasing a new house or condo is still a possibility if they are willing to make some compromises, such as having a co-signer or opting for a smaller place in a cheaper neighborhood.

Homeowners with floating interest rates will undoubtedly feel the effects of rising interest rates this year, but that doesn’t mean those with fixed rates are safe. Once the mortgage has to be renewed, the current interest rates will apply, as well. Those who already own their home and struggle to make their current mortgage payments will also not benefit from the rising interest rates predicted for the 2019 real estate market in Toronto and the GTA. Areas like Markham and Scarborough house a large number of people who are up to and above their necks in mortgage debt even before the interest rate hikes. For homeowners like these, cutting back on other living expenses may be the only possible option to keep their home, which comes with problems of its own.

The Good News about Rising Interest Rates for Toronto’s 2019 Real Estate Market

While the rising interest rates have sent many Canadians into a panic to buy now or save every cent they can, there are some positive aspects to consider here. For one thing, the average income is also expected to increase. This will make increased interest rates for the 2019 real estate market seem not quite as drastic. In fact, even with approximately $1,000 more going towards debt repayment this year for the average household – nearly an 8 percent growth – the average Canadian will make $1,500 extra compared to last year.

The mortgage stress test introduced in 2018 that forces buyers to be able to manage a mortgage that is at least 2% higher than their contracted rate has a bad reputation among many Canadians, but it’s has a good purpose. The stress test helps future homeowners to buy within their means in this new age of rising interest rates for the 2019 real estate market in Toronto. While the homes you can buy may be more limited and you may have to settle on something a little smaller or out of the way, you are also less likely to be in a position where you can’t afford to make your mortgage payments. This is a good thing considering Toronto and the GTA are considered to be hit especially hard by increased rates due to an already staggering 2:1 debt-to-income ratio.

Additionally, the 2019 real estate market is already shaping up to be in better condition than last year. Interest rates are not predicted to exceed over 2.8 percent growth and housing prices are to remain relatively the same, with the possibility of a 2 percent increase at some point during the year. While this may not be the best of news for those planning on selling in the 2019 real estate market in Toronto, the plus-side is that the value of big homes that many Canadians will no longer be able to purchase will eventually decrease, making them more affordable once more. There will also initially be less competition than in previous years to buy a home in the GTA, allowing those who can afford to make a larger purchase the time to think their decision through instead of rushing to be the first to make a good bid.

Should You Buy in the Face of Rising Interest Rates for the 2019 Real Estate Market in Toronto?

There is no reason not to buy a home, despite increased interest rates for the 2019 real estate market in Toronto, as long as you can afford it and as long as it is going to be an investment you plan to keep for quite a while. As always, purchasing a new house is a big financial decision that requires a lot of thought especially in buyers market 2019. If you are serious, however, about purchasing a home this year, it is a good idea to do it sooner rather than later before the interest rates for the 2019 real estate market in Toronto and the GTA go up again. My recommendation to consult with your Mortgage Broker or Bank to discuss all of your mortgage options.

Talk with Me to Learn More about what the Rising Interest Rates have in Store for the Housing Market 2019 in Toronto

If you are worried about how rising interest rates will personally affect you and your chances to buy a home, you’re not alone. Consult with your Mortgage Broker or Bank to discuss all of your mortgage options.  I can help you navigate the 2019 real estate market in Toronto and find you a home that is within your budget, even with additional increases in the New Year. Call me at 647-519-5751, or reach me by email at arshadhussain29@gmail.com to talk about your house search.

The information on this blog based on my experience.  Readers/Users are strongly recommended to obtain independent mortgage, legal, tax or accounting advice. The information displayed is for reference only

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