“Don’t panic” on housing market: principal broker
“I think that 1% [increase] really had a huge impact, psychologically. The psychological impacts are always shorter-term – people have to get used to it,” she said. “That’s why my prediction is, after the summer and the next winter season, next spring everything will be going [back] to normal, because everybody takes it for granted the interest rate is higher.”
Lending rates remain low by historical standards, Xu said, with the rock-bottom rates that prevailed during the first two years of the COVID-19 pandemic an “abnormal” exception that would not have arrived in ordinary times. She also emphasized the real estate market as a long-term investment, with the return of higher immigration levels likely to herald a busier market in the future.
“For long-term investment, demand and supply always have to balance,” she said. “In a larger city like Toronto, there are so many new immigrants coming, and the younger generation are looking for housing. We still have huge natural demand.
“I don’t see the price really decreasing and never coming back [up] again. It’s just right now, we’re in a calmer market. I don’t even think we’ve reached demand-supply balance yet.”
For Xu, the current market represents plenty of opportunities – particularly for buyers who no longer have to contend with a frenetic bidding process and the high possibility of missing out if they don’t move quickly enough.