May 2022: The Toronto real estate market has seen a steady decline in transactions over the last year, but prices have stayed steady. What does this mean for you?

If you're looking to buy, it means you should take advantage of the opportunity while it lasts. With fewer transactions happening, there's less competition—which means you can get exactly what you want at the price that works for you.

If you're planning on selling, it means now is the time to do so! This is a great time to sell because there are fewer people competing for your house, which means if you have an attractive listing and a good listing price, someone will likely snap it up quickly.

And if you're thinking about investing in real estate? It's never been a better time—especially if your focus is on buying up low-cost properties that can be rented out and resold later with minimal hassle or stress.

May was a great month for real estate, but there were some surprises in the numbers. Year over year transactions were down 38.8%, which is not surprising as this is a continuing trend leading to the high demand. What is surprising, or maybe not, depending on who you are, is that prices were up 9.4% from last May, which is less than the last few months when we were seeing 15% and 22% average price increases.

The market seems to be settling into a new normal: an 8-10% price increase compared to the last several years' average of 20%. This change is being driven by lower-price homes, which are seeing less demand than they used to while high-end luxury homes remain in high demand.

While the market might seem unpredictable, there are usually some good reasons for the fluctuations we see. With an in-depth analysis of previous trends and a discussion of current events, we can gain some insight into what's likely to happen in the future. These insights can help us make better decisions in our own lives—whether that means deciding to purchase a new home now or waiting until the market has slowed down even further, or deciding that now would be a great time to sell your home. The Toronto real estate market is complicated, but it doesn't need to be feared.

February 2022 Market Analysis📈🏠

February continued to show a large increase in dollar sales (up 27.7%) while sales volume was down (16.8%).  The demand for new listings vs the low supply is the biggest reason for this dollar sales increase.  TRREB believes that we will see “a more moderate pace of price growth in the second half of 2022”.  One of the biggest reasons for this will be the interest rate increases that are scheduled throughout the year that could go up 1.25%.  The first increase of 25 basis points was on March 2.

A 27% increase in dollar sales in not sustainable and the TRREB predicted last month a 12.5% increase in overall home sales (condos and houses) for 2022.  Even 12% is prohibitive for many first time buyers but 27% is unhealthy.  Once again, I feel that increasing the supply of new homes (including condos) will lessen demand and give a more balance home buying market.  By balanced I fee 6-8%.  Doug Ford’s announcement on January 19 to decrease unnecessary delays and pledged a $45million fund to “cut red tape and sped up the process of managing and approving applications for building new homes.”

2022 Toronto Real Estate Market Outlook

Before I start this year’s summary, I wanted to answer one of the common questions that I am asked’ “When is the bubble going to burst”?  I am asked this or some variation of this. Firstly, I am at fault as much as anyone else for using metaphors especially when we read the so called “experts”.  The answer is that we aren’t in a “bubble”, we are in a supply demand economy where the demand far exceeds the supply and there is NO sign of that stopping.  Depending on what report you read, we are 1.5-1.8 million homes short of the demand in Canada and this number is only growing as we see more immigration and growth.  So the estimates for 2022 see further prices rising as they have basically since 2000 with no reason to stop.

2022 Market Outlook and 2021 Year in Review – SUMMARY

Below is a summary of the 28 page document that TRREB put out on February 3, 2022.  The link to the FULL DOCUMENT is available here

Demand for home ownership will remain strong throughout all of TRREB (GTA):

• Total sales in 2022 is predicted to reach 110,000 which is a dip from 2021 but strong compared to previous years.

• The average selling price for all home types will climb to $1,225,000, a 12% increase from 2021.

Key Findings:

• The number of prospective buyers will dip, including first time buyers.

• The number of current homeowners who want to sell will also go down

2021 Year in Review

In 2021 there were a number of record breaking months of sales.

Takeaways:

• Average sale price was $1,095,475 – up 17.8% from 2020

• A strong resurgence of condo sales

• Total home sales reached 121,712, exceeding the previous record set in 2016 and up from 95,0666 set in 2020

What trended in New Homes:

• Single family new home sales started strong in 2021 but lost steam later in the year with total sales being down 20% from 2020

• Pre-construction condo transactions continue to soar with the City of Toronto and Durham Region leading the charge

2022 Market Outlook: Highlights and Key Drivers *

*Survey results from ipos

Demands for residential real estate in the GTA remained at or near record levels through the 2nd half of 2021. TRREB is forecasting another strong year for 2022.

As previously mentioned, home sales through TRREB will fall off to 110,000 but average sale prices will increase to $1,225,000 representing an approximately 12% increase compared to 2021.

There are a number of factors influencing this forecast:

• Labour Market Recovery – positive impact

• Immigration renewal – positive impact

• As a result of the pandemic and historically low interest rates, many families purchased before they had planned to, thus “artificially” pushing sales volumes up in 2020 and 2021 which will catch up in 2022 pushing sales down – negative impact

• Higher borrowing costs. The general consensus is that there will be three .25% interest rate hikes in the year (the first one might be .50%) – negative impact

• Lack of inventory

  • Sales – negative impact

  • Prices – positive impact

Polling also suggested that home buyers who were VERY committed to buying in 2022 remain committed while those who are the fence may hold off for a year.

Further to this is an interesting fact about “first time buyers”.  It seems that the overall first time home buyer intentions seem likely to drop in 2022 compared to 2021 while in the “416” area code this percentage will actually go up.  This is likely a result of the resurgence of the condo apartment demand we experienced in the latter part of 2021.

New Home and Condo Sectors

• Combined, 2021 new home sales were up 23% for the first 11 months of 2021 from 2020 and recording its third best year on record primarily thanks to the condo apartment market.

  • Condominium sales were up 50% from 2020 and, as stated previously, single family new homes started strong but tailed off to be about 20% less than 2020.

Conclusion

Toronto real estate market will be experiencing significant changes and it will likely see both a rise and a decline. The real estate market is one that depends much more on supply and demand as opposed to the supply and demand of jobs within the Toronto city limits or within the Toronto's suburban area. One of the factors that will have an outsize effect on overall real estate market is expected to be the increased availability of housing which will be coming with the rising of the property taxes in the Toronto city limits.

Cell: (416) 899-6401
Office: (416) 495-3140
Email: joe@glenhomerealestate.com

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Toronto Real Estate Market Update: December 2021

December 2021 is now in the books!  I don’t know about everyone else but in my family, there were 2 trips cancelled over the holidays and Christmas dinner went from 9 down to 4.  Omicron really did a number on our dinner, and I know on many others dinners, not to mention vacation plans.

Looking at December Stats, sales Year over Year were up 24.2% but just 2.5% when looking at seasonal growth from November 2021 to December 2021.  This is really a tremendous increase in average sales noting that December 2020 had a large increase over December 2019.  It would appear that January, now that Ontario is in a Level 2 lockdown, with Restaurants closed and many people being laid up with COVID (Omicron) the streets are quieter again and people are not looking at real estate right at this time.  Plus, it seems that many people are going somewhere south (if they can) to get away.  The stress that the pandemic has had on families and individuals is immeasurable and its effects will show itself in the years to come.

December transactions were down 15.7% and I see that trend continuing.  All signs are that this latest variant will be short lived and if you have your vaccinations that the effect is less severe, but will it run through Canada by February or maybe March or we could say April?

 Once again, be well and be safe.

Toronto Real Estate Market Update: November 2021

November sales continue to break records. Selling prices up 21.4% Year-over-Year and 2.5% from October and Days on Market down 35% from 28 days to 18 days. With this, new listings are down which is driving up prices (supply and demand).

What is interesting, the area of Rosedale and Moore Park (C09) is having a very aggressive Fall, with prices up over 20% each month and unit sales up.  2021 will show the strongest unit sales in years! The other area that I watch is C02 which encompasses the Annex, Seaton Village, Casa Loma and Yonge and Summerhill (west of Yonge). This area also has seen prices and unit sales go way up year-over-year with the highest unit sales in 4-5 years and dollar sales up 15-20% this fall.

As we enter a “new phase of COVID” with the Omicron virus creating new restrictive travel measures and closing off of Canadian borders to some countries starting in early December it has many rethinking their travel plans for Christmas and the winter months, fearful that we may go back to those shut downs of the spring of 2020. Hopefully this will not happen and all these preventive measures ensure that the new virus is minimized and we go into 2022 with a much more positive and upbeat approach.

While we are in early December and the Christmas lights are out and the seasonal music is playing and stores and restaurants are open and there definitely is a sense of joy (albeit a sense of unsureness as well) in the air I want to wish you all a healthy holiday season and hopefully we can all look around and find a reason for thanks.

Joseph Robert

Broker of Record

Cell: (416) 899-6401
Office: (416) 495-3140
Email: joe@glenhomerealestate.com

Toronto Real Estate Market Update: October 2021

Last month we saw a shift from the first to the second half of the month. The 2nd half of October brought colder weather to Toronto, while the first half we were still able to get away with shorts and tee shirts, it continued with the trend of less sales and prices being flat from last month but high from October 2020 which was still adjusting to COVID prices. Looking at the sales number of October 2019 (back when most of us had never heard of COVID or Coronavirus) we can see $852,000 average sale price (a 5.5% increase from 2018). October 2020 saw a 13.8% increase from 2019 and this past month saw a 19.3% increase from 2020. Obviously, the old adage of listing and selling before Thanksgiving is no longer a rule. A large drop in listings of 34.1% has also contributed to this high demand and thus higher prices.

As I have said in the past, government policies to slow down prices by creating more taxes are short sighted methods of the simple minded. Instead, governments should be looking at ways to increase supply and thus lowering demand by creating more homes in the GTA. One of many ways is by helping builders build more residences whether they be Condominiums or Freestanding homes.

As I said last month, I feel that a normalization will continue, and we will see prices for the winter of 2022 go back to a “normal”. But a new normal it will be if demand remains high.

Joseph Robert

Broker of Record
Cell: (416) 899-6401
Office: (416) 495-3140
Email: joe@glenhomerealestate.com

Toronto Real Estate Market Update: September 2021

TRREB just brought out their September 2021 sales figures. Not surprisingly, prices were up 18% year over year but when seasonally adjusted, they were only up 1.8% from August 2021. Volume was drastically down 18% year over year and only slightly up by 0.7% from August 2021.

This is due to the fact that in September 2020 we were still seeing the impact of COVID pricing, lower interest rates and other items that were effecting the real estate market. The basically flat numbers from the previous month speaks to a “levelling off” of demand this fall to a steadier market where we are going to be getting back to a range of 6-8% market value increase. What is interesting is in the luxury home market where in C01-15 (Central Toronto) the volume of $5M homes sold in September 2020 vs 2021 rose from 12 to 23, an almost 100% increase.

I believe October will continue in this trend of 10-12% increase in prices from 2020 and a mild increase in prices from September.

As always, if you have further questions and/or wish to discuss real estate specifically as it concerns you, please don’t hesitate to contact me.

Joseph Robert

Broker of Record
Cell: (416) 899-6401
Office: (416) 495-3140
Email: joe@glenhomerealestate.com

Toronto Real Estate Market Update: August 2021

August 2021 continued to show strong results with prices up 12.6% Year over Year and 2.4% from July (seasonally adjusted). As I said last month, the Year over Year numbers are starting to come more in line as the “COVID Effect” of the Spring and Summer of 2020 takes on less of an impact. This month of September and going forward we should see Year over Year numbers come back as the key, true, indicator as to market changes.

What is interesting is a slow down in the market (less sales) in August of 19.9% from 2020 and 2.7% from July. I personally feel this could be a result of the great, extremely hot, weather we had in August and with restaurants, bars and other service establishments reopening indoors and more people getting on planes and travelling on vacations.

September is going to be more “normal” with kids going back to school, more people going back to work in actual offices and people trying to move forward with their lives.

Joseph Robert

Broker of Record
Cell: (416) 899-6401
Office: (416) 495-3140
Email: joe@glenhomerealestate.com

Toronto Real Estate Market Update: July 2021

July continued on the recent trend of Summer 2021, which includes recovery from 2020 and adjusting from the Spring of 2021; where we saw very robust activity and high prices. This past month we saw a slight increase in prices over the month before (0.9%) and 12.6% increase from the year before (this is still the effect of market adjustment due to COVID-19). Transactions were down from last year 14.9% and down from last month 2%. I would account for this being that a year ago we started to see an uptick in activity that moved into the fall of 2020 and the winter of 2021 and lost some steam last month.

August will be much of the same and then in September we will be busy once again with a more normal fall market. Although not 100% normal as we will still be dealing with the after effects of the major COVID-19 impact and some of the lingering challenges (Delta variant etc).

For Buyers, August is always a good time to look at properties that have been sitting or did not sell and have been terminated (perhaps to come back in September) and see if an opportunity arises. There is less competition to be able to reasonably negotiate with the sellers vs a high stress bidding war.

Thank you and, as always, don’t hesitate to reach out if you would like to discuss my comments further and if you would like a more in depth analysis in your specific area as Toronto pricing is often area specific.

Joseph Robert

Broker of Record
Cell: (416) 899-6401
Office: (416) 495-3140
Email: joe@glenhomerealestate.com

Toronto Real Estate Market Update: June 2021

June saw a year-over-year increase in sales prices of 17% (June 2020 vs June 2021) but seasonally adjusted prices were flat or 0% (May 2021 vs June 2021). The seasonally adjusted numbers in this era of COVID are more relevant. Volume of sales was up 28.5% year-over-year but down -9.1% when looking at seasonally adjusted figures. Days on Market were, once again, down 34.6% compared to last year. It appears that June started to get back in line with “real” year-over-year historic sales numbers. What I mean by that is that for the last 6 months it was very difficult to compare price increases to the same month in 2020 when from mid-March to mid-June real estate sales dropped off to a near standstill while the world was trying to figure out what was next.

In the fall of 2020 and the winter and spring of 2021 we were in “catch up” mode with lower interest rates, pent up demand and the new reality of homeowners truly wanting to find the “right size”. This could mean a bigger home since owners were working and living in the home and the children had virtual schooling or selling as people wanted to move out of the city as working from home was more viable now. It feels that July and August will be more of a normal summer real estate season with many people thinking of other things like travelling (mostly within Canada), going to vacation properties, or just enjoying the re-opening of Toronto and all it has to offer. Summer 2020 was still playing catch up and as such there was an increased amount of activity. Summer 2021, I believe, for the most part in Toronto Real Estate will see a more normal season and, as such, come the fall we will see the normal uptick once everyone gets back to school and we start moving into “regular life”.

Joseph Robert

Broker of Record
Cell: (416) 899-6401
Office: (416) 495-3140
Email: joe@glenhomerealestate.com