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HYPE IS A FOUR LETTER WORD Hyperbole is defined in Webster’s as a “figure of speech that greatly exaggerates the truth”. The GTA housing scene is in full hyperbolic swing! There’s an old adage in the new housing business that when the media catches and reinforces the hype of surging real estate markets it’s nearly over! The news from the GTA housing scene in the last several weeks has been formidable. Record sales, prices rising, shortage of supply, multiple offers etc. etc.! Yet the news from the general economy has been of caution, of recession, and of slow growth. It is true that housing is behaving in a contrarian fashion to the general economic market. It is true that historically low interest rates have delivered exceptional affordability. It is true that low rental vacancies have pushed renters to ownership. It is true that there is a very tight supply of resale housing stock. It is true that there is an emotional tug towards housing in response to uncertain world environments. These truisms have sparked demand and the media has fuelled the hype. But it is you and I as consumers who make the graphs turn upwards. It is our actions in the marketplace that influence demand. The commitment to home ownership is a powerful entity. It strengthens community and family. It reinforces economic performance and is the largest single employer in the province. However, the commitment to housing is not a race. Housing as a commodity is a long-term investment - not a short-term speculative stock. Housing is shelter first - stable investment second. It has been subject to speculative distortion in the past and the consequences are not pretty, both for the consumer and the industry. So be careful of the hype. Take your time and carefully weigh your housing options. Resale supply will improve significantly in the coming months. There will be greater choice. Mortgage rates will remain historically low at least through the first half of this year and you can lock in a commitment for up to eighteen months. Don’t be in such a hurry. It’s okay to miss out on what you were “hyped” into believing was a “one of a kind”, “last chance” opportunity. When one door closes – another door always opens. I’m only slightly biased but if you want to avoid the current stressful scene of multiple offers and paying over asking price in the resale market – buy new! There is extensive choice, significant supply, stable prices and above all great value. You might compromise modestly on location but the end result is fundamentally more house for the money. Whichever you decide, new or resale, don’t get caught up in the hyperbole. It’s your deposit cheque – spend it with care and wisdom, and above all take your time. Keep Positive!
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