Since the new mortgage stress test rules were put in place in 2018, everyone’s been on the edge of their seat wondering if the changes would drastically halt Toronto’s construction growth. And the answer is no! New figures released by the Building and Land Development Association (BILD) point to a boost in sales above last year’s historic low. How did this happen? We’ll explain more here.
As sales dropped sharply last year, builders started to quickly adapt to overcome what everyone expected to be another down year. By offering a bigger selection of new homes at lower price points, developers were able to boost sales even in an otherwise challenging market. This has helped give this sector a nice 14% increase YOY in January and a 20% increase in sales YOY in March.
Even with the said increase in sales, Toronto is still in dire need of more housing options to meet the growing demands of a rising population. To help meet these needs, builders are now focusing on providing entry point product to help millennials and first-time home buyers get into the market sooner. This has resulted in more high-density neighbourhoods that include mid-and-low rise condos, row houses, and stacked townhomes at affordable prices. Also, redevelopments and infill projects throughout the city are also on the rise in a fight to bring more housing to the market.
More affordable housing on the market is creating new opportunities for buyers looking for bigger homes, investors, and downsizers alike who have also been recently limited by the stress test. Purchasing a house now at the low rates being offered can mean exceptional returns in the future when the market ticks upward. Plus, the increase in new home sales is a promising sign for developers as it indicates that an upswing back to recent levels is once again possible. Don’t be surprised if you start to see an increase in lots being developed and available properties on the market this summer and fall.
Are you looking to invest or build in today’s current housing market? Contact us at Medallion Capital Group. Our team are the go-to experts in Toronto real estate development, property management, mortgages and sales. If you have a site you are interested in developing or redeveloping, we can assist you with the entire process from start to finish. We understand the current development environment, and our vast network within the industry can help you realize the maximum potential of your project. Reach out today, and we’ll discuss the latest opportunities in the market and how you can take advantage of them.