GTA existing homes sales may break record this year
A new record will be set with sales of existing homes in the GTA expecting to reach six digits for the first time by the end of 2010, but a report by the CMHC says things will be "quite different" for 2011 as the market edges down.
"The era of rock bottom mortgage rates is coming to an end and the red hot Greater Toronto Area housing market will begin to lose its steam," said Shaun Hildebrand, senior market analyst for the CMHC.
Sales in the GTA are expected to pass the 100,000 mark for the first time to 101,000. In 2007, sales hit $95,000 dollars, the peak of the market.
The CMHC also expects the rise of price appreciation to continue into 2011 which will result in 16 consecutive years of increases. They also forecast that prices will slightly increase by 1.7 per cent at the end of next year.
They also say that prices will probably flat line after 2011 as affordability becomes an issue.
"Five year mortgage rates will be a full percentage point higher by the end of the year. Combining higher rates with the new reality of average prices well above $400,000 will make the transition to homeownership more expensive," said Hildebrand. "The erosion of affordability will cause delay for many first time buyers."