Strongest May Ever!

The Toronto Real Estate Market reported only a 2% decrease in sales over last year at this time. Many would be suprised to read this statistic as 2010 was touted a ‘boom’ Spring Market. Selling prices have grown at a faster rate over the last few months of 2011 compared to 2010. This isn’t surprising given that the number of available homes for sale versus interested buyers is again, creating a seller’s marketplace.

Another reason for the strong sales reported this month is a reflection of a positive outlook on the economy of the GTA and the stable low interest rates. Many were doubtful what with a Federal election scheduled in the middle of the real estate market’s strongest season, but the outcome has only spurred activity. With growing earnings and the numbers of jobs increasing it makes sense that households remain confident in their ability to purchase and pay for a home over the long term.

The Bank of Canada is widely expected to leave its key benchmark interest rate unchanged next Tuesday — and may even sit on the sidelines until September, economists say. That’s good news for consumers who will continue to enjoy record low interest rates on mortgages and other borrowing. Even if the central bank leaves it’s overnight rate unchanged at 1 per cent next week, it’s likely that interest rates will be going up. Just when that is, is unknown. Late last year, and even at the beginning of 2011, economists were certain that the Bank of Canada would start increasing its overnight rate this spring. That was pushed to the summer amid continuing worries about the health of the U.S. economy. Now more economists are expecting that the central bank will take a pass at its July policy meeting as well, and begin raising rates in the fall.