South Etobicoke is a great place to call home. With quiet residential streets, amazing views of Lake Ontario, large lots, and easy access to the city – there’s really no other place quite like it!
Despite being right next door to Toronto, South Etobicoke can follow its own trends when it comes to real estate. And, as the city’s previously fast and competitive market starts to slow down thanks to rising interest rates, South Etobicoke is also seeing changing conditions for buyers.
If you’re considering buying a home in the area, here are a few market insights to consider before you jump in.
The Market at a Glance
To understand today’s buying conditions a little better, let’s have a look back at the last few years. In March of 2020, the Bank of Canada dropped their target interest rate to prevent economic damages related to the COVID-19 pandemic. Overnight mortgages became significantly more affordable and a new wave of eligible buyers rushed to the market. This only added fuel to the fire of Toronto’s already competitive real estate landscape.
During this time, South Etobicoke remained somewhat sheltered from the record-breaking prices of the city centre. However, as Toronto became increasingly expensive and crowded, a greater number of buyers became drawn to Etobicoke’s larger lot sizes and relatively affordable properties. This caused local market dynamics to slowly begin shifting.
Rising Interest Rates
Finally, in March of 2022, the Bank of Canada announced it would slowly begin increasing interest rates to pre-pandemic levels in order to correct rising inflation. These raises suddenly made lending more expensive, meaning far fewer buyers could now afford a home. This change caused the seemingly unstoppable seller’s market to slow down and eventually balance out. Now, homes are spending more time on the market than they used to and prices are beginning to dip.
Need more info about buying in South Etobicoke? Check out these blog posts.
- Building a Custom Home in Etobicoke: What You Need to Know
- Buying For the First Time? Should You Expect to Compromise?
- 5 Exciting New South Etobicoke Condo Developments
Costs of Lending
While home prices in South Etobicoke aren’t on the rise, for most buyers, the complete cost of homeownership is becoming more expensive. With the Bank of Canada’s recent interest rate hikes, mortgages have become substantially less affordable for buyers.
Let’s put things into perspective. At the beginning of 2022, the bank’s target rate sat at just 0.25%. Today, in late August, it’s now 2.5%. For buyers, this ten-time increase means a significant raise in monthly mortgage payments. This has pushed homeownership out of the realm of possibility for a lot of people.
That being said, with a higher down payment, you can reduce the costs of interest on your mortgage. If you’ve got a lot of money saved up and are comfortable making a large down payment, entering the market today could come with some great advantages.
If you’re thinking about buying in South Etobicoke you’ll want to work with a local agent. Find out why here.
Over the past ten years, buyers in the Greater Toronto Area have had to deal with a lot of competition. Tactics like bidding wars, condition-less offers and generally low inventory have previously made finding the perfect home difficult. In today’s market, a smaller volume of buyers means that those who can afford a home are enjoying easier shopping conditions. So although lower home prices are offset by rising mortgage costs, buyers today do have some advantages.
First and foremost, a greater number of properties on the market means you’ll have more to choose from when picking your new home. And, as homes spend longer on the market, you can really take your time in finding the right one for you. When you do find your dream home, you’ll have the ability to leverage today’s market in your negotiations. Plus, fewer buyers mean a smaller chance that you’ll find yourself in a bidding war. This gives you the opportunity to include conditions in your offer or even submit a lowball offer.
Want to learn more about South Etobicoke’s many great communities? Check out these blog posts.
- Long Branch: Etobicoke’s Lakeside Gem
- Buying and Selling in Alderwood
- The Best Neighbourhoods in Toronto’s Far West
Unsure if now is the right time to buy? Ask an expert! As a local real estate agent, I would be happy to help. Reach out.