Less than 3 months ago the real estate market in the GTA was in a much different state than it is today. It was common for condos for sale to get 20+ showings within a few days. During this time, our team managed to sell some condos as high as 120% of asking the price! So why did the Mississauga condo market dip recently?
On April 20th, this all changed when the government of Ontario passed a new law called the Ontario’s Fair Housing Plan. Under this new legislation, 16 new measures were introduced to help more people find affordable housing, increase housing supply and provide a way for the real estate market to balance out a little more.
As a result of the changes, the number of freehold home sales dropped by over 20% in May 2017, as compared to May 2016. Condo sales have only dipped by 6.4%. This might suggest that these new rules had a more meaningful effect on pricier properties, rather than the affordable real estate.
Despite the number of sales being down, the prices for most condos have stabilized compared to what they were last year.
When talking to some of our buyers we noticed a few of them decided to see “how things play out” before buying their next property. On the other hand, some sellers decided to “cash in” on their real estate holdings which have appreciated nicely over the past few years. This, partly explains the imbalance in the market which has caused the number of transactions to go down.
What can we learn from this?
- The market can change VERY fast.
- The market is driven more by perception than actual hard data.
- A period of 3-4 months worth of real estate data is required to say if a market is falling or going up in price.
What will the future of Mississauga Real estate look like?
The truth is that nobody has a crystal ball and can tell for certain what exactly happen. That said, I do think that the slowdown in the real estate market will be temporary.
If history repeats itself like the way we have seen it in Vancouver, prices will slightly increase by next year, while the number of transactions will drop. The days will be gone where properties are appreciating 10%+ per year and sellers are getting hundreds of thousands of dollars over asking price.
This might be the “soft landing” and the balanced market we have been waiting for.
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