Welcome to Summer!

It seems like forever, but summer has finally arrived with warm weather, blue skies, and long days! Toronto real estate continues to be a great investment. Prices for the first 6 months of 2008 have increased 5.1% over the same time period in 2007 and now stand at $390,839. While the number of sales is down from 2007, this year’s sales are similar to 2006, which was an excellent year, with 83,084 homes selling that year.

The number of sales slow down due to the season so I would expect that approximately 7,000 homes will sell in July, with prices being 4%-5% ahead of last year. As sales slow down, the number of homes available for sale continues to increase, creating a great opportunity for new buyers to enter the market. The market continues to be driven by first time buyers as 57.4% of the homes sold in June were between $200,000 and $ 400,000.

You are probably wondering what planet am I on that I am so positive. Haven’t I been reading the newspapers; the doom and gloom about the economy, unemployment and the price at the gas pumps? The answer is, yes I read it, heard it, and saw it on TV, years ago! And in all of those years it hasn’t changed, because the media feed on our fears in order to sell advertising.

The average price of a home today is $390,839. 30 years ago it was $21,184. The Canadian Government forecasts that by 2036 IF the rate of inflation stays at 2% the average price in Toronto will be $1,141,485. I think it will be higher, because inflation will be hard to keep to 2%. Crazy? Just as crazy as prices were 30 years ago. Why did this occur? Primarily immigration and inflation. As costs to build increase, so do existing home prices. The GTA is now over 5,000,000 people and forecasted to be over 8,000,000 by 2036. Last year immigration into Ontario was 175,000, with 150,000 estimated in 2008. Those people have to live somewhere and as demand increases so do prices.

I can’t go back in time to buy houses at $21,184 but I can buy now! That’s why I am so positive. If it’s happened in New York, Tokyo, London and even Moscow, it will happen here.

If you are thinking of setting up a retirement plan, give me a call and let me show you how real estate can be an effective part of your plan.

Have a great month. When it gets hot, remember its only 170 days till it snows!

Sunny Batra
Your Friend in Real Estate.

P.S. I am never too busy for your referrals!