For the last several quarters we’ve seen prices in the Toronto housing market continue to soar in evidently problematic conditions. There are comparisons drawn between current day and the housing bubble in Toronto in the late 1980s, early 1990s, however, there is debate as to when we can expect to see a slowing of price increases.
Theories propose that potential new property buyers are ‘sitting on the sidelines’ to see what happens before attempting to buy. This is coupled with existing homeowners opting to renovate instead of purchasing new properties, as we’ve delved into in our previous article, Five Reasons to Build a Home Addition Instead of Moving.
Biggest problems in the market
According to the latest quarterly Housing Market Assessment from the CMHC, the main factors indicating problematic conditions for the Toronto market which have been prevalent for the last few years include:
- Overheating – the situation where demand vastly outweighs supply of existing houses for sale on the market
- Consistent acceleration of housing price increases
- Overvaluation – housing prices that can’t be sustained based on the current market fundamentals e.g. due to speculative purchase based purely on the idea that prices will continue to increase and therefore provide a profit
While the year on year comparison for July from the Toronto Real Estate Board suggests a slowing of growth (an increase of ~5%), the summer slump can easily be attributed to the sidelining of would-be homeowners whom, once re-entering the market, will be subject to the same overheating conditions.
The growing renovation trend in Toronto
According to a recent poll by CIBC, there has been a significant increase in Canadian homeowners planning to renovate in the next 12 months (48% of those polled compared to 37% in 2016) with Ontario having the biggest increase in average planned expenditure (from $13,878 up to $15,988) despite a slight decrease nationally. The increase in renovations adds credence to the idea that existing homeowners are holding off investment in new properties in Toronto and investing more in increasing the resale value of their current homes.
Biggest headaches with home renovations
A similar poll by CIBC from 2016 found that among the top 5 irritants in renovating their home were going over budget and finding a reliable contractor. RenoAssistance provides information on average costs you can expect relating to bathroom, kitchen and basement renovations as well as home additions in the Toronto market. You can also view many of our past client’s completed renovation projects with their price tags attached to gain a better idea of the cost you can expect to implement similar changes to your home.
Finding a reliable contractor
While there may be certain DIY projects you are comfortable undertaking, when it comes to more complex renovations it is usually wise to hire a contractor who specializes in the type of work you’re looking to have done. There are several things to consider when looking for a reliable contractor since they are someone you are trusting with the appearance and functionality of your home, your time and your money.
RenoAssistance partners with local contractors in the Greater Toronto Area who have met our strict criteria to obtain our Verified stamp of approval. As part of our verification, we conduct reference checks with past customers to ensure the quality of their work, bank and supplier references for proof of financial stability, complaints and legal history, necessary insurance as well as licensing and qualifications. We will also show you a verification report detailing our assessment before you meet any contractors we refer.
You can speak to a renovation advisor who will gather information about your renovation requirements and refer up to three specialized local verified contractors to provide competing quotes. The service is free for our customers and there’s no obligation!