Will the GTA housing market experience a slowdown this year?

On the heels of a hot housing market for 2016, Global TV’s finance expert Preet Banerjee thinks we’re going to lose some steam as 2017 progresses. Owing largely to the change in mortgage rules that will mean some buyers lose between 15% and 20% of their purchasing power, and the fact that many people are living month to month with little put aside for emergencies, we could be facing a slow market.

A so-called “Trump Bump” as a result of higher bond yields spurred by some of the US president-elect’s policy announcements, and the resulting higher cost of borrowing for banks, could mean higher mortgage rates in the near future.

Not all predictions are gloomy – many experts are saying that Toronto’s position as a finance centre and the still-low supply of detached and semi-detached properties will make the GTA the country’s strongest market this year.

But still, change is afoot. It always is, and every new year brings uncertainty. Aside from keeping an eye on things, what should we be doing to help the housing market stay healthy?

Remember that the market is cyclical. It’s been so strong for so long that we just expect it to continue, and of course it can’t. If there isn’t a downtick in prices, there will be at least a plateau. The biggest thing is simply don’t panic. Uncertainty we can overcome — blind panic we can’t.

To keep your options open and make you more manoeuvrable in the marketplace, don’t start out the year getting into more debt than you can handle. Confidence is key in any housing market, as in life. If you’ve planned well for major expenditures, whether new cars, new furniture or a European vacation, indulge yourself and enjoy. If you haven’t planned for them, do without, at least for now. If you’re poised to make a well-thought-out housing purchase in the spring, get pre-approval now to fix your mortgage rate for the next few months.

It’s important that we start looking at the housing market, and the economy in general, in longer terms. Buying a new home has become an itch that we can immediately scratch, and we may need to adjust that thinking. We don’t all get an 1,800 square foot centrally located starter home.

I’d like to see us turn our attention towards smaller, micro-economies that at least partially untether us from the vagaries of faraway markets and changing government legislation. We use the word “community” a lot in the housing business, but if we started thinking in terms of community when it comes to our purchasing, we could all be better off.

Buy local and help keep your neighbours employed, and think entrepreneurially about your own career. What could you do to help stimulate growth in Burlington or Oshawa, instead of directing all your professional energy towards the downtown core? Love where you are, instead of worrying about where you’re not yet.

I think we’re going to start seeing this shift in thinking now — millennials, who are on the cusp of controlling the market, are passionate risk-takers, who prioritize quality of life over corporate security (which, let’s face it, is a myth anyway). I think we’ll see growth for some less conventional housing communities as well, like co-ops, multi-family partnerships and tiny homes, which will give first-timers options they don’t have now.

Millennials are quick to embrace the philosophy of “no pain, no gain” too, and aren’t afraid to take on a mission — important qualities when it comes time to push through the legislation and create the demand that will see government and financial institutions support unconventional ideas that aren’t “the way we’ve always done it.”

As always, the housing market is both a harbinger and a barometer of public sentiment. Let’s make 2017 a positive year.