The Best Mortgage Rates in Toronto

Toronto Key Stats

• Toronto population (2011): 2,615,060
• Dwelling units (2011): 1,107,851
• Unemployment Rate (2012): 8.2
• Employment Level (2012): 2,962,000
• Average Weekly Earnings (2012): $894.61

Source: Stats Canada, CMHC

Toronto Mortgage Rates to Moderate in 2013

Mortgage rates are expected to remain at historical lows for the first portion of 2012 before moderating later in the year. The CMHC forecasts that the 1-year posted mortgage rate will be within the 3.1 to 3.6 range, with 5-year posted rates in the range of 5.0 to 5.4 per cent. Rates are expected to rise in 2013 to 3.5 to 4.1 per cent for 1-year, and 5.1 to 5.6 per cent for 5-year mortgage rates.

Source: CMHC

Toronto 2012 Housing Market Outlook

Economic growth appears to be stalled in the Greater Toronto Area this year, with employment growth slightly below the country's average. Unemployment also hovers above the national average at eight per cent. Due to this, migration to the province of Ontario is anticipated to be the lowest it has been in 10 years. Prospects for the job market are expected to improve in 2013, however, setting the housing market for increased demand and offsetting the fading effect of historically low mortgage rates.

Affordability in the Toronto market has declined 70 per cent since 2008, with less than a quarter of sales under the $400,000 price range. The average MLS sales price for the city is expected to reach $500,000 in 2012, for a total of 95,000 units. As a result, the required savings to make a five per cent down payment has risen to $25,000, effectively shutting the first time home buyer segment out of the market.

New construction starts are expected to reach 44,500 units this year, much of which can be attributed to new condo construction. Multi family housing has gained popularity in the Toronto area, especially for those looking to enter expensive neighbourhoods for a price sometimes less than half that of a single detached unit. However, quarterly growth for condo prices has flattened, as inventory begins to accumulate. With approximately 18,000 condo start completions a year, there will be limited potential for these prices to rise faster than that of inflation.

Prices have more potential to increase in the single-family resale market. As this increase has created strong amounts of equity for current owners, they are in turn moving into higher price points in the market. Though the average single detached resale price will hit $600,000 in 2012, data shows that this is still within the affordability range of target demographic, which has an annual earning power of $120,000.

Source: CMHC Housing Market Outlook

Toronto Housing Market & Mortgage Rate Forecast