(Ontario Real Estate Source)
By Brian Madigan LL.B.
The Toronto residential housing market has been very active.
The question for some investors is when does the market move? And, is it too late? Let’s review the ORES Housing Index. It started on 1 January 2005 at base 100.
An interesting question would be when did it reach its peak? So, what was the year end figure? And, how early in each year was that number reached?
2010
In 2010, the market started at 126.58 and rose to 134.29 by the end of the year. It had reached the year end figure by March.
2009
In 2009, the market started at 106.34 and ended the year at 127.48. It took until September-October to reach the year end figure.
2008
In 2008, the market commenced at 115.88 and completed the year at 111.84. The entire year was not in decline. The market reached 123.21 in May, and thereafter went into decline.
2007
In 2007, the market started at 109.46 and ended at 116.43. It reached the year end figure by March-April.
2006
In 2006, the market started at 102.95 and ended at 104.05. It had reached the year end number January-February.
2005
In 2005, the market started at 100, and rose to 101.26. It reached the year end figure by January-February.
Analysis
It may be difficult to draw any firm conclusions, but the market often peaks early, in the winter months, 2005, 2006, or the early Spring 2007, 2010. It could be the late Spring as it was in 2008, or even the Fall as it was in 2009.
Each year is subject to its own pressures. Late 2008 saw a world wide economic recession, and 2009 saw the signs of recovery later in the year.
In a normalized market, without a recession, the peak often is seen in the early months of the year. This is due to:
• Pent up demand
• Shortage of housing
• Lack of choice
• Appreciation that the market is moving upwards
• General inflation
Any given year can have its own individual factors which alter the trend. However, the clear and predictable trend appears to be a “yearly markup” in prices. That happens early in the year. In effect, an entire year’s growth can all be reflected in the price escalation over a couple of months.
The important matter to note, is that when prices start to decline somewhat, the market is not going into a tailspin. It’s normal. It simply means that more product has come on the market resulting in something of a slowdown. But, it’s also the time when the better properties are often available.
Brian Madigan LL.B., Broker is an author and commentator on real estate matters, if you are interested in residential or commercial properties in Mississauga, Toronto or the GTA, you may contact him through Royal LePage Innovators Realty, Brokerage 905-796-8888
www.OntarioRealEstateSource.com
