Sales Commentary GTA Year-Over-Year Summary for August 2017 A lot of people seem concerned about our real estate market – especially my agents! Yes, the market has been slow since April, and yes prices have backed off in the house but not the condo market. That’s because house prices had an unsustainable run up – not just this spring but over the last three years where we had double digit price increases. In August TREB reported 6357 sales, down 35% from August of last year, but 8% higher than in July. During July, daily sales averaged 191 units. Over the first half of August it was 193, but in the last half it rose to 215 sales. In the condo market sales were 24% lower in August than the same month last year. Downtown condo sales were down by 22% but they were 15% higher than in July! A similar ...
Toronto Market Report September-October 2017
September 19, 2017
Toronto Market Report August-September 2017
August 9, 2017
Sales Commentary The market continued its sales decline for the fourth straight month. Sales on TREB were 5,921 units in July, down 40% from last year’s number of 9,929. Historically, sales should be in the nine thousand range. Are we concerned? No – in fact we prefer this market to that of February and March. Back then, the market was driven by irrational behavior which was unsustainable. The current slowdown is psychological. Sellers still want March prices and buyers expect a price correction of 25%. The reality is neither will happen. Prices are down by 15% from their peak but are still 15% higher than a year ago. The question is: who will outwait the other? Our bet is on sellers! Unlike buying groceries that cannot be postponed, buying real estate can be deferred but only for so long. Real estate is not dominated by speculators and foreign buyers but ...
Toronto Market Report July-August 2017
July 21, 2017
Sales Commentary June marked the third month in a row where sales declined from the previous month. TREB sales at 7974 units were down a whopping 37% from June of 2016. They were also down 21% from May. Last year was a record year with 113,000 sales. Our own forecast for this year was for 105,000 sales. Year to date, we are at 55,000 sales. Historically, the midpoint of the year represents about 52-54% of the year’s sales. That would translate into a final number of 102,000. In 2016, the June yearly sales were 60,000 which was 53% of the final number. So why are we looking at the market this way? Everyone talks about the speculator and foreign investor components of our market. The reality is that most sales are a result of changing needs. People change jobs, they marry or divorce, they have kids, and they die. All ...
Toronto Market Report June-July 2017
June 26, 2017
Sales Commentary The big or new story with this market is the shrinking sales numbers – lower sales have been recorded every month since March. Starting in the first two weeks of April, sales on TREB averaged 435 per day. The last half of April the daily number was 345. In May we averaged 329 sales per day and with the mid-month report for June, we are at 214 sales per day. Historically, May and June are the biggest sales months of the year. For 2017, our biggest month has been March. So why have sales dropped? It began with prices skyrocketing by 30% at the start of the year. Buyers couldn’t wait to throw money at average properties because there was little to choose from. Everyone knew this price explosion would not last long. It was just a matter of time, and that time came at the end of ...
Toronto Market Report May-June 2017
May 23, 2017
Sales Commentary We have delayed this Report to wait for mid-month May sale numbers from TREB. It confirms what we said previously. The market peaked in terms of prices, and it looks like it peaked in terms of sales as well in March! While April sales were 3.2% lower than for April of 2016 at 11,630 units, they were also down 3.5% from March of this year! Peak sales months are usually May and June each year. For the first half of April, we averaged 435 sales per day. Over the last half of April, it was 345. For the first half of May, the sales number was 359 per day. Based on seasonality, this number should be higher but it also supports the view that we are not in a market correction but rather a temporary slowdown. We have always maintained that our market, in terms of prices, is ...
Ontario's Expansion on Rent Control
April 21, 2017
Why the Government’s sudden preoccupation with rent controls? The media has reported two cases where the landlord doubled the rent from $1600 to get rid of a tenant. The current rules of the Rental Tribunal make it very difficult to evict a tenant for non-payment of rent or for carrying out illegal activities. This is the only resort for landlords to get a speedy resolution. In both instances, the landlord needed to sell the unit as vacant. We can tell you that landlords value good tenants and want to keep them. By keeping a good tenant, you avoid vacancy costs and you save on leasing commissions. Good tenants can usually get rents below market for these reasons. But there are more tenant voters than landlords. Hence, we have rent controls which will not be good for tenants in the long term. We currently have a vacancy rate under 1 ...
Market Report April-May 2017
April 21, 2017
Sales Commentary Paranoia seems to have set in with the rapid rise in real estate prices over the past year – almost 30% year over year. And most of this increase has happened in just the past four months. Now Governments at all levels are ready to act! But wait! The market in terms of prices has already begun to plateau. It started in the last 10 days of March and has extended into the first two weeks of April. So what has changed? We started from a market with a shortage of listings to one where listings are now at more normal numbers. In the first 14 days of March we averaged 450 new listings per day. Over the last 17 days of March we averaged 630 new listings. At that rate we would have 19,000 new listings in April. So why the increase? For years, many people in ...
Toronto Condo Market Report March-April 2017
March 22, 2017
Sales Commentary February sales on the Toronto Real Estate Board were up by 5.7% over February of last year – a slower increase than any month in almost a year. Is this a sign of a slowdown in buyers? No. The problem is a continued lack of listings to buy. At January month end, we had 5,000 ‘active listings’ and by month end for February we were at 5,400. When you factor out those listings that will never sell and you look at 12,000 buyers per month for the spring market, you see a problem. Continued price increases that show no signs of easing. In the downtown condo market, sales were up by 12.8% in February and in Humber Bay, sales were up by 35% over the same month last year. But more concerning is the drop in ‘active listings’ in these two markets – down 64% and 70% from ...
Market Report February-March 2017
February 21, 2017
Sales Commentary The Toronto Real Estate Board no longer publishes mid-month sales numbers hence we are forced to guess the market going forward, based only on January results. In January, overall sales were ahead by 12% over January of 2016, but active listings were 49% lower than the 2016 number. We are starting to see all listings sell at over the list price. Some by as much as $200,000 which is scary! In terms of the downtown condo market, January sales were up 23% over the same month last year but ‘active listings’ were down by 57% from last year. The result is the same as the overall market, multiple offers and most sale prices above the list price. This is the first time, we have been concerned over the state of the market. This imbalance has caused prices to spike by over 20% in the last twelve months. But ...
2017 Toronto Real Estate Market Forecast
January 10, 2017
Share of Total Condo Apartment Sales By Bedroom Type (All Areas) Source: Toronto Real Estate Board Q3 Many forecasters or pundits get bogged down in irrelevant statistics. Past experience has shown that the view from ‘the street’ has been more accurate than the ‘view from the executive floor’. In real estate, lower sales do not automatically translate into lower prices. And the average price to average income ratio for valuing property prices over a number of years is also of little value when you consider the impact of immigrants, non-residents, and self- employed buyers in today’s market. If you want further proof, just read our 2016 Forecast versus what actually happened in 2016 on our website. GTA Year Over Year Summary 2016 2015 % Change Sales 113,133 101,213 11.8% Average Price $729,922 $622,121 17.3% Average DOM 17 22 -22.7% New Lisitngs 154,266 160,520 -3.8% FACTORS AT PLAY ...