Home Staging Toronto � Toronto Home Staging Blog

The article below by Tony Wong was published in the Star on March 20th.

Tammy Siergersma spent most of the winter renovating a home in east Toronto. It was a big investment for the designer, who over the last decade has bought and gutted about half a dozen properties, each time making a profit as she put them on the market.

This time the project was much more personal. The property was within walking distance of her own house near the increasingly gentrified neighbourhood of Leslieville.

“It was much closer to home, and I know I would likely end up meeting the buyers at the No Frills, so the last thing you want them to do is complain about the place,” laughs Siergersma.

But with reports that the spring market may be weaker this year than last, and with Canadians up to their eyes in debt, Siergersma could be forgiven for wondering — are there any buyers left?

Spring is the ultimate barometer for the housing market, when buyers are venturing out once again after shaking off the shackles of winter. While the season doesn’t officially start till March, the hyper market of the last few years has seen activity generated as early as February.

So far sales have been trending down from last year’s record levels, but have been holding up better than expected. In the first half of March, sales in the Greater Toronto Area are down by 5 per cent compared with last year. The average price of a home is now $460,196, up 4.6 per cent from last March. But the million-dollar question for buyers and sellers is whether prices will hold. So far the current run-up in house prices has been one of the longest since the end of World War 11. Home prices have increased every year since 1996. But analysts are wondering whether this is the year that the party will stop.

“This spring should be reasonably vibrant, but the second half of the year could be a different story,” said Sal Guatieri, senior economist at BMO Capital Markets.

Many economists think the market is overvalued, but not all agree that a correction is in the cards. With the economy giving mixed signals, the experts are not in agreement. Forecasts range from a 25 per cent drop in housing prices to an increase of 5 per cent.

The consensus though, seems to be that the housing market is in for a relatively soft landing, although house prices aren’t going to be galloping ahead as they have in the past, with modest gains at best in the future.

“I think this spring is the last kick at the can,” said Benjamin Tal, senior economist for CIBC World Markets. “Next spring will definitely not be as good. After that we are in for a long period of maybe five to seven years of stagnating house prices.”

Tal says a “little stagnation” after 16 years of continuously rising prices in the GTA is probably not a bad thing.

Property prices in relation to incomes and rents are already much higher than long term averages, says Tal.

“In order for things to go back to normal levels you would either have a crash, or for prices to go flat.”

BMO’s Guatieri agrees that pricing will be constrained moving forward. The Bank is forecasting that the key overnight central bank rate will double from 1 per cent to 2 per cent by the end of the year which will put a further crimp in some budgets, especially for first time buyers.

New stringent mortgage regulations reducing amortizations that kicked in last week are also expected to take some buyers out of the market.

And by this time next year overnight rates could be as high as 3 per cent, according to some analysts.

That’s significant. According to a recent survey by the Canadian Association of Accredited Mortgage Professionals, about 4.5 per cent of variable mortgage rate holders said they couldn’t afford their payments if rates increased by just 100 basis points.

“My concern is that given relatively high house prices and high levels of consumer debt in Canada, as soon as interest rates begin to rise significantly, purchases of new and existing homes may decline rapidly, especially for first-time home buyers,” said John Andrew, a urban and regional planning professor at Queen’s University. “The relative equilibrium that currently exists in the market could quickly give way to a glut of houses for sale, due to a rapid drop in transactions.”

Guatieri says all bets are off if the economy dips back into recession. Global stock markets are in turmoil as Japan fights a potential nuclear disaster, while the Middle East faces an uncertain political future.

“If you have a situation where people start losing their jobs again, then that would be a trigger,” says the economist.

At home, Canadian debt-to-income levels are already at the highest in history, and equivalent to the United States. A combination of rising rates and job losses could be devastating.

However, Tal feels a crash is unlikely.

“Just because we are overvalued doesn’t mean we will correct. You need a catalyst. That could be a huge increase in interest rates, or it could be some kind of subprime loan situation that you had in the United States. None of that seems to be on the horizon.”

There are a few mitigating factors. On a macroeconomic level Canada is doing relatively well, and will likely top the Group of Seven economies with GDP growth.

“Economic conditions in Canada continue to improve. The unemployment rate is trending lower, employment levels are above pre-recession levels, wages are growing and financial conditions remain very easy,” said Bank of America Merrill Lynch in a report.

But no need to get cocky. Growth will still be weak.

“It’s really just a reverse beauty contest. We look the least ugly in many economic measures,” said Scotiabank chief economist Warren Jestin.

Still, the housing market in Canada has avoided the mess in the United States. And buyers and sellers this spring look like they’re in for a reasonably balanced market.

When Siergersma started her renovation business four years ago, every home sold for more than what she had bought it for. The current spring market will likely see that trend continue.

“There is still a lot of interest out there. People have the money in hand and they are ready to go,” she said. “I don’t know what’s going to happen in the future. But so far it’s been a great spring.”

When she first bought the property, it was in such bad condition that the appraiser from the bank assessed it as “unliveable.” The first bank wouldn’t advance a mortgage.

But more than $200,000 later, the detached home has been transformed from decrepit to designer chic.

After placing the home on the market two weeks ago, Siergersma had more than 90 buyers the first weekend of her open house. It sold conditionally this week for $695,000, the highest price on the street.


Independent of market conditions, home staging is a highly effective marketing tool used to maximize the selling price of Toronto area homes and condos.

StagingWorks is the premier Toronto home staging company. We provide a complete range of professional services which include vacant home staging, occupied home staging and condo staging. We have staging packages to accommodate most budgets and serve Toronto, GTA and surrounding areas.

Please visit our home staging portfolio for more samples of our staging projects. Give us some some details on your home and when you’re planning to sell, and get a free home staging estimate. Or, call us for a free estimate at (647) 409-2091 or anne@StagingWorks.ca.

StagingWorks has been voted Toronto’s top home stager by Toronto Life.





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