My Two Cents: When will condo prices drop?
Whether you’re seriously looking into getting into the real estate market or simply at a party striking up conversation, the talk of whether condo prices will drop is becoming more prominent. It is generally agreed that Toronto’s housing market is currently a seller’s market. Homes are getting multiple offers left and right and though there are little dips here and there – minor speed bumps in the grand scheme of things – average prices have been in an upward trend for the last 60 years.
A speed bump is likely just around the corner, however no matter what anyone says, the extent and timing of the dip is still uncertain. I was personally told by a reputable agent less than 2 years ago in 2010 that condo prices were too high and that they would drop within the year. I made an educated decision and bought anyways. The market value of my condo unit has already appreciated over 10% since then. Had I listened to the advice, I would have lost on the investment opportunity.
What I’m trying to say is that anything can happen. Interest rates can rise. Unemployment can increase. The market could indeed face a 10-15% decrease in the next couple of years and I could be down on my investment. Though it’s easy to become sidetracked by speculation, I can’t lose sight of the fact that each situation is unique. My purchase is in a downtown Toronto neighbourhood that is up and coming so should a dip occur, I believe the risk impact from a market downtown is very low.