How can we say this with such certainty? There are at least 3 solid indicators:
#1 2019 is Ending Very Strongly
All property types in Burlington have seen gains in 2019. But the “condo apartment” market has experienced the most dramatic increase in value this year: a remarkable 20%, with a 12% bump in October alone. The “Days on Market” were also slashed in 2019, with it taking nearly 10 fewer days to sell on average than in 2018. Finally, the inventory in Burlington is extremely low and that has resulted in nearly everything selling. At the end of November, the Burlington residential market was sitting at only 1.6 months of inventory according to a report published by RE/MAX this month. So heading into 2020, one thing is clear, we are in a SELLER’S MARKET.
#2 All Key Ingredients for a Good Market are Present:
- low interest rates
- high levels of employment
- rising immigration
These ingredients have fueled the real estate market in the past and most certainly will help in 2020.
Additionally, we are seeing a greater number of Millennials becoming more financially secure and entering the market. They are looking for affordable housing and this means seeking alternatives to downtown Toronto living where the price per square foot is nearly $1000. In order to assist in the affordability issue, it sounds as though the Trudeau government may be considering easing the mortgage stress test in the coming year. While no decision has been made, we do know that a letter has been sent to the Finance Minister to “review and consider the issue” (Financial Post Dec 13, 2019) . That said, a recent RE/MAX report stated that consumer confidence in the market is way up. Fifty-one percent of Canadians are considering a home purchase in the next five years, up from 36% at the same time last year. And, only 2 in 10 Canadians say that the mortgage stress test negatively affected their ability to purchase a home in 2019.
#3 Burlington is Extremely Desirable
Rated the #1 community in Canada by Macleans magazine, Burlington is a top choice for buyers. In particular, this GTA suburb is sought after by those who are new to Canada, those who work in Toronto and are looking for a place to raise a family, down-sizers looking for a quieter place to retire, and Millennials trying to get into the market.
According to a Genworth/Royal Lepage poll released in May, two-thirds of Torontonians say they feel anxiety about saving enough for a down payment for a purchase in the city. While Burlington is still an expensive option, with the average price for a detached sitting at nearly a million dollars, buyers know their money will still go further and get them the space they need in a home, and perhaps more important… a yard. With the average cost per square foot sitting at about $500 (rather than $994 in Toronto), there are more entry level options for buyers in Burlington.
With a picturesque location on the west shore of Lake Ontario, Burlington offers residents easy access by transit to Toronto’s downtown core and a short drive to the fun and beauty of Niagara. This perfect location has been a huge factor in making Burlington such a desirable place for buyers is the past and is likely to continue to make the city a good choice for people to invest in real estate.
What We Predict for 2020
With all these factors in mind, we, Your Burlington Neighbourhoods Team, see the Seller’s Market continuing in 2020. Move-up and Move-out (of Toronto) Buyers will drive the pace of the Burlington real estate market and Buyers should expect to see multiple offers on properties. If inventory continues to be low, Realtors will be more inclined to follow the Toronto model of “holding back offers” to see if they can get more for their Sellers. While RE/MAX recently predicted a 3.8% appreciation in the average price of Burlington properties, we think it is likely to be closer to 7% given what we are seeing on the ground and all the indicators discussed above.
Our 3 Pieces of Advice for 2020
Seller’s Markets are nothing new. For most of the last decade in the GTA Sellers have had all the “hand”. So we speak from experience.
1) If you are buying and selling, buy first (assuming you have a normal saleable home in the area). Buying will be more difficult than selling. You may lose several homes to other Buyers before you get one. And when you do finally purchase, selling a little later should mean that you will benefit from any appreciation in the market.
2) Consider buying sooner than later and without 20% down. If the market heats up as we think it could, every month that passes could mean more expensive homes, and any savings you could acquire will likely be outpaced by the appreciation of the market.
3) Educate yourself as quickly as you can with a local Realtor who knows the neighbourhoods. I have an idea, use us! We know the details of the micro markets within our city. These details are important. A blog such as this only discusses the big picture for a whole city. Every area and property type has its own trajectory. If you are buying a townhome, you will want to know about townhome sales. If you are buying in The Orchard you will want to know about the activity in that specific area and what it means for value when there is a train track in your backyard.
Our Final Message to You
Get out there. If you’re thinking of buying in 2020, start looking at houses. You cannot learn the market on your computer or phone. Give us a call and we will customize a whole tour of the city for you. Knowledge is power. Knowing the micro markets and being able to jump when a good deal is available is how you’ll make money in real estate in 2020.
We look forward to helping you.
Bradbury Estate Realty Inc. Brokerage