As the real estate market entered the first week of May the mood was different, there was a sense of change in the market. Previous market pressures eased creating an abrupt slow down, and now it seems there is a bit of a lull period. There are a few reasons that can account for this. The first quarter of 2017 had seen unsustainable prices growth, close to 30% increases. Long term property investors that may of had no intentions in selling were seeing such price gains and decided that now is the best time to sell and cash in on those gains. This in turn has increased the supply of property, creating more choice for buyers. The government recently announced the “Fair Housing Plan”. It’s too early to see the true effects of these recent Government announcements but initial reactions will have some buyers sitting on the fence anticipating change, effectively, temporally reducing the pool of buyers. Also some buyers may be thinking price increases that sudden in the first quarter suggest the market is nearing the top and have decided to pause and wait it out in the hopes of a market correction. Then there’s your typical Spring market, which was a bit delayed this year. It’s normal for a lot more properties to become available heading into the warmer months. Most sellers don’t like to list in the winter so when spring arrives eager sellers flood the market with supply providing buyers with more choice. This is all healthy for the market. The first quarter growth was unsustainable and could not last. Increases in inventory are welcome and needed to create a more balanced market. Buyers in the first quarter of 2017 had to adjust their budgets to compete to get into the market. Incredible demand and lack of supply saw some buyers purchasing up to 25% over the listed price. Now, with recent increase of inventory by close to 33%, sellers are finding they need to adjust their price expectations accordingly. Just to note, this lull period shouldn’t be mistaken for any kind of correction but buyers and sellers adjusting and adapting to the recent market activity. On the whole there is a supply & demand issue throughout the city, especially in low-rise properties. This recent injection of available inventory will be absorbed and prices should still continue to increase but not at the rate experienced in the first four months of 2017. Current market conditions would suggest now is a good time to consider buying. More properties to choose from and fewer buyers competing for those properties translates into a good opportunity!!
By Rory O’Donovan – Real Estate Sales Representative.
