“Consumer confidence is something we have to be concerned about. And whether it’s founded on factual information or otherwise it still affects us,” he told CRE Online.
For years, analysts have debated if and when average house prices will correct, with some claiming home values could plummet by as much as 25%.
TD Economics released its prediction in early July, saying that average prices would drop by 10.2% over the next two years. BMO Capital Markers, on the other hand, has offered a much more conservative estimate, saying that prices will only correct by 2% by the end of 2012.
But making these predictions isn’t an exact science, Ritchie said.
“I live and breathe this industry every day, but I don’t know anybody, including myself, who can accurately make those projections,” he said.
Investors a little skittish about the market right now should keep in mind the long-term sustainability of the Toronto condo market before they decide to stop investing, Ritchie said.
House prices may soften when the Bank of Canada resumes raising its key lending rate, but over the long-term Toronto is poised for continued growth. Immigration, in-migration and job creation all favour the city, Ritchie said.
“We expect the market to go up and down that’s just natural, but on a long-term basis we think we’re in the right business.”
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