First a quick summary of 2014:

- Median Condo Prices were up about 1.5%
- Mortgage rates held steady with 1 year rates just under 3%
- Supply/Demand ratio consistently hovering in the lower Balanced Market territory

Predictions for 2015

This is where I'm going to go out on a limb and share more of my personal thoughts about the market and economy than I typically do. Keep in mind, just like all predictions, I could be wrong and you need to research a variety of opinions before making your own decisions.

- Despite the Federal Reserve talking about raising interest rates, they won't, because their underlying economy is still too fragile. They're trying to get inflation going but commodities are showing deflation. "QE" (money printing) is not over, just Europe's turn. Will likely see more QE late this year or early 2016. Canada watches these moves closely and will follow suit, not raising interest rates in 2015.

- With interest rates remaining low, lending practices continue as they are now. Low mortgage rates entice Buyer's into borrowing more. Most obvious in nice detached home neighbourhoods where we've seen price increases of 8% (2013) and 9% (2014)... 17% in the past 2 years. That kind of growth is a little worrying. Whenever someone mentions a real estate bubble, they almost always refer to condos. I don't see a price bubble in the top graph, do you? I believe the increase in supply from new condo construction has resulted in more moderate/sustainable condo prices. Perhaps not ideal for short term investors but better for long term ownership and stability.

- The supply of new construction condos in the GTA this year will be about 17,000 units. Same as the last 4-5 years and same as at least the next 2-3 years as they're already pre-purchased. With rental vacancy rates remaining about 1.6% in Toronto, there's very few empty condos. If a new construction condo buyer can't get top dollar for their investment, they can always get a good rental income stream. Another important indicator of market health.

- With low interest rates, low rental vacancy rates, the banks high lending qualifications and Toronto's continued draw of immigration from the near and abroad... I just don't expect anything to change from 2014 to 2015. So I think condo prices will be up about 2% in 2015... boring but stable. Unless we see some kind of Black Swan event, which could effect any investment, I expect another stable year for condos. Keep in mind the impact of your mortgage leverage. If you have 25% paid off, your actual return on your equity would be: 100/25 = 4, 4 x 2% = 8% return. An educated, professional real estate agent will net you more money. We're always happy to meet you for a coffee and discuss your real estate ambitions.

All the best in 2015!