This is a question that I find a lot of people are asking... how high can prices go? For how long will this continue?

 

In order to try and answer your question we must first identify the factors contributing to market growth. I'll speak about two key contributing factors.

 

Borrowing rates are extremely low. According to data obtained from Rate Hub (https://www.ratehub.ca/mortgage-rate-history-canada) the Bank of Canada Prime borrowing rates since the year 2003 (4.5%) have not been this low since 1956 (4.5%)!! From the mid seventies and continuing into the 80's and 90's we experienced years filled with rates in the double digits. Today's Bank of Canada prime lending rate is 2.70% (http://www.bankofcanada.ca/rates/daily-digest/). 

 

Why do rates matter? In one word affordability. Lenders perform calculations to determine how much you can afford to borrow and the lending rate is a part of that calculation. There are a few calculations that come into play such as TDSR (Total Debt to Service Ratio). I invite you to use one of the many online mortgage affordability calculators such as this one available at Rate Hub - https://www.ratehub.ca/mortgage-affordability-calculator . I've input some numbers to illustrate the impact between a 2.35% and an 8% mortgage rate.

 

 

That's a difference of $623,894. Income and down payment are the same, amortization is also the same.. the only difference is the rate. Low interest rates work to increase a purchaser's buying power.

 

There is tremendous demand for housing in the GTA!

 

"The Toronto Region’s population base is one of the fastest growing in Canada; growth between 2001 and 2014 equaled 87% of the total population of Calgary in 2015. More than half of the global population (54%) now lives in cities, and by 2050 it is expected to grow to 66%. Toronto has more than twice the proportion of recent immigrants (8.4%) as Canada (3.5%). Toronto’s population continues to age. Seniors represent 15% of the city’s residents, and it has been projected that the GTA will have absorbed more than half the provincial increase in the over-75 population between 2011 and 2016."  source http://torontosvitalsigns.ca/main-sections/demographics/

In other words we have natural population growth as well as tremendous immigration to our great city and everyone needs a place to call home.

 

We have a limited supply due to many factors, not the least of which being the Ontario government's anti-sprawl/ smart growth policy. There are many articles available on the web that comment on this issue, here are two I've previously shared via my Facebook page.

 

http://urbantoronto.ca/news/2016/09/greenbelt-does-smart-growth-policy-impact-affordability

https://www.thestar.com/business/2016/10/29/is-ontarios-anti-sprawl-policy-really-that-smart.html

 

I'll sum it up the articles for those visiting this page... there is limited land for building in the areas people want to live most and it does not appear that there will be more land made available soon.

 

So to come back to your question Stephanie, "Is the current rate of growth over the last 5 years that has been seen in The Valleys of Thornhill going to slow down anytime soon or just continue to climb at double-digit growth year after year?" my answer is that I expect it will continue for the foreseeable future and for as long as rates are low, supply is low and demand is high.

 

If you're looking to move into a larger home I suggest we sit down to examine what we can expect your current home will sell for, as well as what you can afford to determine what your purchasing power is.

 

Please feel free to call me anytime, I'm always happy to help however I can!