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2024 will see a flat to adjusted decrease in average sale prices, here's why

Dated: January 30 2024

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Toronto Housing may falter

Hello all,

In 2024 our economy will take a strong hit from what we know as a financial cycle's peak. Despite a few positive readings that are mostly north american driven, war-inflation driven, and fake feeling regarding interest rate cuts driven readings, this time of the year has always been about Big companies and revisions and reports on last quarter of last year and nothing more!

In our city and greater Toronto areas though, the economy and volume of laon renewals both business and personal loans will see a spike. Consequently the economy will shape into a frictional and not easy to turn wheels economy. 

As per prediction of last year , market has seen corrections in different levels continued and finally a price drop of average sales prices was reported in Jan 2024 for the whole year of 2023.

The fact of the matter is that the city has grown unproportionately. This area that we call GTA is posed to grow further into a 10M population region and by any standards we will have to see the price pressure and pressure on different levels of government to de-regulate and regulate new expansion increase at same time. 

Immigration being the first and more important factor in increase of population, unless birth rate amongst residents spike tremendously into 4%, will boost the demand and at the same time will disturb demand dynamics. This may also, as it has been seen before, put pressure on rental market where majority of immigrants are from a new country and dollar exchange rate will control their purchase power more than FOMO housing and real estate in toronto. These people will gradually absorb new reality and new prices of Toronto GTA real estate and may choose to exit the market as it's easier for them to do so rather than people with ties to the city. 

The fact above has one precondition and I am going to summarize this blog by saying that the economy factor that mentioned in the begining of this post will pay a huge role here. And by removing businesses in this cycle from the economy, this region which has had the highest lease prices in real estate will be hit and prices may not go higher that what it is now and maybe falter to lower levels only because the new employements will not have sustained and old employements end into termination. 

One last closing remarks is that because at some point this year we will have interest rate cuts, however the severity of that would be, the prices of average homes sold in Toronto GTA will not be to track. Lets continue on this journey together and always keep our financial well being checklist in check!

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