It’s not surprising that when TRREB released its July numbers on Thursday, the headlines were that sales were down 47.4%! However, typical of the media sensationalizing things, this was year-over-year sales volume. Sale prices were actually up 1.2% from July 2021, a sign that the market hasn’t “crashed” or that the “bubble has burst.”

Volume is down right now partly because we are in the depths of summer, which is historically a period when there are less sales as people enjoy the warm weather. Whereas the summers of 2020 and 2021 bucked this trend due to the pandemic, and in fact, volume was also down 15% in July 2021 from 2020 despite the market being red-hot last year. The rest can be attributed to the uncertain economic environment we find ourselves in, the result of rising inflation combatted by numerous interest rate hikes this year with more expected to come.

It may be prudent for buyers and sellers to take a “wait and see” attitude until the fall when we have a better picture of where the market will be. However, buyers in the luxury market cannot afford to take the same approach when there is such a limited supply. The “right” properties are not lasting long so buyers must be prepared to act or risk losing out.

We must take a long view of the real estate market and remember why home prices are so consistently strong in Toronto; Conde Nast just named Toronto the 7th best city in the world to live (Calgary and Vancouver were also on the top 10 list), we have an enormous shortage of homes to meet demand in the GTA and Canada at large, and lending rates may be rising but they are still some of the lowest we’ve seen historically speaking.

That said, the fall real estate market in Toronto will be interesting. We expect savvy and educated buyers and sellers who take the extra second to think about the long-term will come out doing very well.

Commentary by Joseph Robert, Broker of Record