It’s believed that predicting the future of any real estate market is a little like rolling the dice. You always hope for the best but know that factors outside your control can tamp down even the most optimistic expectation.

That said, 2019 should be a year in which we approach the Toronto real estate market with guarded optimism. Given its unbridled and record-setting growth in recent years, a kinder, gentler market may be just what the doctor ordered.

2018 was a year of self control for the local market thanks to a number of factors, including rising interest rates and tougher government policies. The government-imposed stress test for mortgages definitely played a significant role. Under the new policy change that came into effect one year ago, buyers had to qualify for a mortgage that was larger than they were applying for. This stricter stress test was imposed due to fears that homebuyers would not be able to service their mortgage debts should interest rates rise suddenly.

Earlier, in the spring of 2017, the Ontario government’s Fair Housing Plan, a move that also caused the market to struggle. The 16-point plan called for a number of policy changes, including expanded rent controls to all private rental units and a 15 per cent tax on foreign buyers.

According to the Canada Mortgage and Housing Corporation (CMHC), existing home sales and starts will post a partial recovery in 2019 after a somewhat dampened 2018. The CMHC expects that buyers will re-enter the market based on the strength of strong-than-expected job growth and in-migration.

“Our key take-away from this year’s outlook is moderation in Canada’s housing markets for 2019 into 2020,” says CMHC chief economist Bob Dugan. “Housing starts are expected to decline from the higher levels we’ve seen recently. We expect resales in 2019 and 2020 to remain below recent peaks while prices should reach levels that are more in line with economic fundamentals such as income, job and populations growth.”

The CMHC report goes on to say that given the GTA’s balanced market conditions, it expects moderate sales growth and the growth of home prices in line with inflation over the next two years. “The rising costs of home ownership will result in strong rental demand while new supply will add some upward pressure on vacancy rates,” says the housing market activity report. “Toronto buyers should see more housing choices as builders concentrate their efforts on new high-rise projects.”

According to the Financial Post, Toronto’s booming condo development will slow down with growth continuing but at a more restrained pace.

Sources: www.financialpost.com, www.cmhc.ca, www.newswire.ca, www.torontostoreys.com,

January is the perfect time to do a review of your finances. It’s a good idea to devote some time this month to looking over previous expenses and earnings, both expected and unexpected, to determine how last year’s pattern may or may not shape this year’s.

That said, January is also prime time to get our financial house in order. Since your mortgage is likely your biggest and most long-term expenditure, let’s look at how we can support paying it down while covering all the other substantial expenses – retirement, vehicles, children’s education — that life throws our way.

Start with a budget

You need to take a long, hard look at your finances. You should know where most of your money, some of your money and a little of your money went last year. Do you know, for example, that 10 per cent of your net earnings went to local restaurants? Are you wasting money on gym memberships and other services that are rarely used? For one month, save every receipt received by you and those in your household. Include charges to credit cards and automatic withdrawals from bank accounts. What you’re spending your hard-earned cash on may surprise you at the end of 30 days.

Make a game plan and be specific

It’s important to specify what exactly you want to do with your household finances – save for retirement, save for the kids’ education, save for a vacation. We can all say let’s save more and spend less but without a specific and realistic amount to shoot for, you’re likely going to fall short. Can you afford to plunk down an extra $500 a month on your household debt? Is that realistic? There’s no point in earmarking numbers you can’t maintain. Perhaps $200 works better.

Consider automatic payments

So you want to save for a big European vacation three years from now? Set up a vacation fund and have your bank withdraw automatic payments each month. The same goes for a retirement fund or savings for your child’s post-secondary education.

Don’t spend, save instead

This is much more difficult than it sounds. Try to commit one day a month or week even when you don’t spend a dime. Bring your lunch to work, watch Netflix with the kids and cook dinner from what you find in the fridge and freezer. This could prove to be a fun and eye opening exercise for the whole family.

Look at your mortgage

Since this is your largest outlay, try paying it down quicker, if you can. Bi-weekly payments pay down your mortgage debt much faster than monthly payments. Another painless method is to round up your payments. So if you’re paying $667 every two weeks round up the payment to $700. You’re not likely to notice the extra $33 but your mortgage will. If you inherit or win money consider plunking it down on your mortgage. Use your raise at work or your annual tax refund to help pay down the principal of your mortgage. Most lending institutions allow you to make an extra mortgage payment per year that is applied directly to the principal. Even seemingly small amounts can add up to big savings.

Sources: www.ratesupermarket.ca, www.capitalmortgages.com, www.canadianliving.com

A new year always brings with it hope and promise for a bigger, brighter and better future. Given that level of optimism, it’s probably a good idea to have some kind of strategy in place to help you achieve your goals.

Here are a few suggestions to help you reach your 2019 real estate related resolutions:

Buyers 

Do you have any idea about your credit rating? How does it fare? You may want to inquire before you apply for a mortgage just to be on the safe side. Speaking of mortgages, get pre-approved for one before you go house hunting. This will indicate what price range you can afford based on a review of your finances. A pre-approval will also provide written confirmation of the lender’s interest rate for a certain period of time. This could come in quite handy especially with interest rates predicted to rise.

Know what you are getting into. The dream of home ownership is fabulous but sometimes consumers get caught up in the pretty little details and don’t factor in the hard reality. A home is probably the most expensive proposition you’ll make. Can you afford it? Is your down payment sizable enough? What is your household income? Is it expected to rise? What are your long-term income/revenue prospects? Do you have enough to cover closing costs, estimated in the range of 1.5 to four per cent of your purchase price?

The Canada Mortgage and Housing Corporation (CMHC) offers a wealth of information and tools to help you figure out if home ownership is right for you. Visit www.cmhc-schl.gc.ca to learn more.

Sellers 

Find a reputable and qualified agent, not your cousin Jimmy. Remember you will be spending a fair bit of time in their company so it’s wise to select a realtor you like or, at least, can tolerate.

Get your financial house in order. Yes, you need to wrestle with your finances when selling as well. Will you have enough after selling to purchase another home? Or do you plan to invest your proceeds or perhaps start a new business with the money? Remember that there are costs you will incur as a seller – home repairs, legal and realtor fees, house inspections and appraisals.

The work. Know that there will be a lot of it. From keeping your house tidy and clean at all hours to getting rid of or reducing clutter, overstuffed closets, sheds and garages, junk drawers, unpleasant smells, unsightly decorating – and on and on. Remember the key is to pare down so store or pack away rarely used small appliances, jewelry, toiletries, out-of-season clothing, reading material, unused toys, artwork and photographs.

If you want your home to present well you will need to give it a serious once over and fix and replace outdated, broken and shabby items. Ask friends or your realtor for help with this as an extra set of eyes will identify problems that you don’t readily recognize.

Sources: www.nexthome.ca