Saturday, April 25, 2009

Toronto's real estate market will not collapse, said RBC

We knew this was the case due to the activity we've seen in the GTA marketplace, but RBC confirms the real estate market is not collapsing any time soon!

Prices seem to have stabilized compared to last fall or early part of this year.

Here is their article.

Toronto — Cyclical downturn, but no collapse

Considering how sharply resale activity fell in the closing months of last year and how quickly market sentiment has soured in the face of worsening economic conditions, the relatively moderate pace of price correction so far in the Toronto area should alleviate fears that the market is on the brink of collapse.

Overall, prices in the area have retreated between 2% and 6% from the peak (depending on the housing type) or just a portion of the cumulative 31% to 47% rise in the previous five years.

Poor affordability remains an issue, but some improvement has taken place in the past year. To be sure, the degree of
“unaffordability” is much less of a threat at this stage than it was at the onset of the
1990s housing downturn.

As Toronto’s economy continues to struggle with the recession in the coming months, housing market conditions will likely deteriorate further, extending the downward drift in prices.

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