27 Sep 2016

12 Key Factors Affecting Property Prices 2016

Toronto real estate market trend shows that 2016 all condos for sale are going to have price inflation. Players in the real estate market, therefore, need to brace themselves for this unprecedented hike in property prices. Potential home buyers also will have to dig deeper into their pockets so that they can afford property. This trend follows a property boom in Toronto and Canada as a whole. In the past few years, Toronto has become a place for ‘hot’ property. There is a huge demand for single-detached homes in Toronto. This means that townhouses for sale are selling off the shelf. With Toronto now as a real estate hub, the demand is more than the previous years.

The last four years have seen the number of condo units rise by 50%. Currently, there are more than 80,000 condo units being developed in Toronto. The demand is obviously high, but the demand has not been as steady. There have been concerns that the prices could fall due to overbuilding. However, the picture on the ground shows a steady growth in the condo market, driven by an increasing demand for these units. The demand may be because some town homes for sale may be a little expensive than condos. Another reason may be because Toronto is now a favourite for national and international real estate developers.
So what influences the prices in the real estate sector? What affects the housing market? Below, we discuss several things that will influence how cheap or expensive a house will be and the elements that impact on the housing industry.
1.Unemployment
More unemployed people in a country mean that they will not be in a position to afford a house. Banks and other lending institutions will readily finance an employed individual to own a house. This is because their affordability level is higher. People may also decline to enter the real estate sector due to the fear of being unemployed. Individuals may fear that if they become unemployed in future, their ability to repay property loans will be hindered. Many houses will, therefore be available on MLS listings without any buyers.
If a large segment of the population is therefore unemployed, lending institutions may be forced to deal with only those who can afford property. This means that growth in the real estate sector will be limited. The demand may also be low, leading to low property prices.
2.Supply
The nature of the real estate sector is that it may face a boom. This will lead to developers putting up houses to take advantage of the boom. However, the developments might reach a point where there are more houses than the population. This usually happens when the market collapses, and the bubble bursts. This leaves the industry with high vacancy rates. In such cases, the houses available on the MLS listings may experience a sharp decline in the prices. In most places, developers are encouraged to consult experts before putting up housing units to avoid a glut in the market.

mls-listing

The last four years have seen the number of condo units rise by 50%. Currently, there are more than 80,000 condo units being developed in Toronto. The demand is obviously high, but the demand has not been as steady. There have been concerns that the prices could fall due to overbuilding. However, the picture on the ground shows a steady growth in the condo market, driven by an increasing demand for these units. The demand may be because some town homes for sale may be a little expensive than condos. Another reason may be because Toronto is now a favourite for national and international real estate developers.

So what influences the prices in the real estate sector? What affects the housing market? Below, we discuss several things that will influence how cheap or expensive a house will be and the elements that impact on the housing industry.
1.Unemployment
More unemployed people in a country mean that they will not be in a position to afford a house. Banks and other lending institutions will readily finance an employed individual to own a house. This is because their affordability level is higher. People may also decline to enter the real estate sector due to the fear of being unemployed. Individuals may fear that if they become unemployed in future, their ability to repay property loans will be hindered. Many houses will, therefore be available on MLS listings without any buyers.
If a large segment of the population is therefore unemployed, lending institutions may be forced to deal with only those who can afford property. This means that growth in the real estate sector will be limited. The demand may also be low, leading to low property prices.
2.Supply
The nature of the real estate sector is that it may face a boom. This will lead to developers putting up houses to take advantage of the boom. However, the developments might reach a point where there are more houses than the population. This usually happens when the market collapses, and the bubble bursts. This leaves the industry with high vacancy rates. In such cases, the houses available on the MLS listings may experience a sharp decline in the prices. In most places, developers are encouraged to consult experts before putting up housing units to avoid a glut in the market.

Interest Rates

Interest rates always have a profound impact on the real estate industry. The ability to own property is hinged on the rates of interest charged by lending institutions. When interest rates rise, obtaining a mortgage to buy a house becomes costly, and therefore the demand and price of real estate goes down. Conversely, when interest rates go down, the cost of a mortgage goes down also, and the demand for real estate increases. House prices therefore increase. At this time, your house on the MLS real estate listing might have a higher demand.
Interest rates may be influenced by many factors, such as inflation and public debt. There are various indicators in the market to forecast the increase and decrease in interest rates. Whether you are a buyer, seller, agent or developer, understanding how the interest rates are influencing the real estate sector will put you at an advantage.

4.Economic Growth
The overall health of the economy affects prices and trends in the real estate sector. Toronto real estate players need to understand economic indicators such as consumer price indices, GDP, unemployment rates and manufacturing data. These are important aspects that help the experts in the industry to come up with fairly accurate information about the future and present of the industry. In most cases, when the economy experiences a downturn, the real estate sector follows suit.
However, when there is a growth of the economy, the incomes of people rise, and this puts them in a position to own homes. The demand therefore increases, and this, in turn, increases the prices of homes. When a country faces an economic downturn such as in a recession, people have less income, and thus they cannot afford to buy a home. Those who are already repaying mortgages may fall default on their payments leading to their houses being repossessed.

5.Availability of Mortgage
When the toronto real estate sector experiences a boom, lending institutions will be keen to offer mortgages to many people. The lending criteria might also not be too strict. Individuals may have access to loans and mortgages at lower rates and sometimes, with very low deposits. There will be an increase in the demand for houses because of the ease of getting financing. However, when this boom ends, the lending institutions might experience challenges in raising enough capital to finance mortgages for home buyers. The lending criteria might change. Individuals might be required to have higher deposits for their mortgages. The demand in the housing sector will, therefore, fall because the availability of mortgages will have decreased.
6.Geographical Factors
The location of property  highly influences the prices. Townhouses for sale located in certain neighbourhoods might be more expensive than in other locations. The desirability of property might be due to ease of access to amenities, transport and communication networks and security. When the economy faces a downturn, the prices of these properties may not be affected. This is because the amenities and services that were nearby, or offered in these locations won’t change. Residential and commercial property are both affected by geographical factors.
7.Urbanisation
Urbanisation leads to the development of places that were formerly under- or undeveloped. A place that had many farmlands might experience a lot of real estate development. If a developer puts up condos in such an area, the condos for sale may fetch a higher price than when the area was previously under developed. Urbanization drives up the prices of property because of an increase in population.
8.Taxes
Some municipal areas have high property taxes that discourage investors. Other taxes such as property purchase tax also could be limiting to some people who may have an interest in purchasing property in some areas. This could, in turn, slow the growth in the real estate market.
9.Government Subsidies
Some governments have put in place measures to address changes in the real estate sector to attract investors. Incentives in the form of tax subsidies, credits and deductions are provided by some governments to help increase the demand for real estate. It is important to seek information about such incentives. The incentives, for example, can help first-time buyers to get one of the townhomes for sale available in desirable areas. This, in turn, drives up the demand for homes.
10.Population Increase
An explosion in the population leads to shortages in the housing sector. The increased demand drives up prices. Developers will be in a hurry to plug the shortage in housing. The rate of new developments might not be at par with the population growth and this has a profound impact on the property segment. The rate of population growth versus real estate growth needs to be considered carefully to get actual data on the industry.
The increase in population might just be temporary. If many property developers rush to put up many housing units without studying the data well, they may have to contend with high vacancy rate.
11.Land Availability
Real estate is mostly pegged on the availability of land. In areas where there is a large population but limited space for development, the prices of houses might be very high. Other factors such as the desirability of the location may drive up property prices. A highly desirable location with access to many amenities but with limited land might lead to an increase in the property prices.
The same applies to laws prohibiting the utilisation of land and zoning restrictions. The impact on the demand and prices of prices is felt by all.
12.Consumer Confidence
The real estate industry sector needs to spur confidence to consumers to take up mortgages. It is a risk taking up a mortgage and therefore, the levels of confidence in the people will determine the growth in the sector.
The housing industry, therefore, is influenced by a host of factors that determine among others, the prices of houses. Any player in the industry needs to understand these factors well. Most factors have an impact on several other factors. It is, therefore, advisable that before you place your property on the MLS real estate listing, you examine each aspect keenly since the real estate industry is an elastic market that is affected by many factors.

toronto-realestate

• THE ABC TO BUYING A CONDO
Toronto real estate market trends show that all condos for sale LINK TO your BLOG Condos for sale are going to have price inflation in 2016. This can be attributed to a number of factors like the increasing growth of the real estate market. It is important that before purchasing a condo, you are well informed. To start with, a condo is a large complex that is subdivided into units. This means that when you purchase a condo, you are going to be living next to and sharing a wall with your neighbor. It also means that you may be living above or below someone else’s house. A condo is much like an apartment.
Purchasing a condo from Toronto Real Estate LINK TO MLS LISTING SEARCH and search for toronto and press search get that link here brings along a number of advantages that you might normally not find with owning homes. If you are looking for a living space that is much easier to maintain in that there are no yards or lawns, then a condo is the way to go. All the maintenance needs in a condo complex are taken care of by the association of that complex.
Condos for sale are also much cheaper than homes, despite the expected inflation in prices, a condo remains more affordable than purchasing a home. A 2000 square foot condo can be valued at around $ 725 000 while a comparable home is going to cost you over a million dollars. The maintenance fee for a condo is also considerably low, and space is easy to manage.
You cannot choose your neighbors and if they are bad, in a condo setting, you are going to be stuck with these neighbors, however, if you love a community spirit, then in a condo you get to interact with your neighbors from time to time. Condominiums have turned out to be exceptionally well known in the land market in Toronto because most people are more attracted by the idea of getting to own a place they can claim ownership to at lower costs.
The search process for a condo in is like any other process for looking for a home, you can easily enlist the services of a real estate agent or even go to websites and look for condos that are in the area you want to live in and that have the features you are looking for in a good condo.
Before signing away your money, it is important that you understand all the conditions that come with living in the condo. Two key documents need to be analyzed:
• The sales contract
Understand and preferably go over all the terms of the sales contract with your lawyer before you sign it to ensure that the contract is legal and properly stated.
• An agreement on how the condo operates
Are there any special requirements for owners living in the complex? What is the process for having repairs and maintenance made? Discuss all issues pertaining to the condo before purchasing.
These two documents are important so that you are able to understand how the management deals with issues, what are the rules governing the condo and whether these rules are going to curtail your preferred way of life.
Why you want to buy a condo is also important. Make a list of why you prefer a condo to a home. Besides the pricing, there are other reasons why a condo might be just what you are looking for. A vacation home, for example, a condo is more suited as a vacation home as compared to buying a home because when you leave your home for a long time, the backyards and necessary maintenance will not be taken care of and may not give the experience you were hoping for during the vacation.

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