The interesting thing about June is we are seeing more potential buyers coming back to the market.
They are expecting prices to drop and believe that if they wait a few months longer, they can get a better deal. It has not really happened. In my opinion, a few reasons for that are as follows:
- Historically low MLS inventor
- Strong Canadian economy
- Huge number of potential buyers with money
- The desire to own property
- Sky rocketing rent prices
We can even see investors are coming back to the condo market.
A small example from this month:
$400,000 2 bedroom condo at Square One.
The investor paid 20% Down payment. Rent: $2200/month
Monthly Mortgage Payment: $1,425 (%2.45 5 Year Closed Variable, 25 years amortization).
Property Tax: $1897. Maintenance: $590/month all included
As a result, we are getting a cash positive investment plus the mortgage is getting paid. This solution would be an alternative to your RRSP contribution. By your retirement (depending of your age), your condo will be paid off.
What else is new this month? A new mortgage product hit the market: an interest-only mortgage. The borrower only pays the interest on the mortgage through monthly payments for a term that is fixed on an interest-only mortgage loan. The term is usually between 5 and 7 years. After the term is over, many refinance their homes, make a lump sum payment, or they begin paying off the principal of the loan.
Home sales in the Greater Toronto Area rose 2.4 per cent in June compared to the same month a year ago, and were 17.6 per cent higher compared to May, according to the latest data released Thursday by the Toronto Real Estate Board (TREB).
The slight year-over-year increase followed a steep sales drop of 22.2 per cent in May across the GTA compared to May 2017, reflecting what TREB says is a continuing trend of volatile buyer reaction to various policy changes impacting the market.
In the chart below some stat data related to sales in Streetsville Mississauga in the last 40 days: