In Review Most experts got last year’s forecast for Toronto real estate correct: that there would be no slowdown in sales or prices. But we were the only one to call for a record sales year for TREB and for a growing imbalance in sales between 905 and 416 areas. For 2016, CMHC and all the big banks are calling for lower sales and a slowing of price increases to zero or just the rate of inflation. In fact CMHC says that TREB sales will fall to 87,500 units by 2017 – a 13% decrease. The reasons advanced are that previous price increases have removed buyers from the market along with an expected increase in interest rates. In fact RBC is forecasting that the Bank of Canada five year bond yield will double to 3.3% by year end. In contrast, our forecast focuses on demand and supply issues. While affordability ...
January 2016 Market Forecast
January 7, 2016
How To Track the Toronto Condo Market
October 7, 2014Canadian Condo Market Toronto Real Estate Market Forecast Toronto Condos Tips for Real Estate Agents Videos
Last week we talked about how you can track and forecast the condo market. We said all you need to do is look at three statistics. The level of immigration in the GTA The annual level of new condo completions The amount of mortgages in arrears Today I want to talk about the second statistic, Condo Completions. In the pre-construction market, there are all sorts of stats. From new condo sales to units under construction, to unsold units and more. The problem with all these numbers is there is no third party verification and no agreed upon definitions. Anyone can report pre-construction sales, and what does under construction mean? It could mean a hording around a building site or a building thirty four stories in the air. The only real number is condo completions, that is, when a condo units is registered and enters the housing pool. The fact is ...
JULY/AUGUST 2014 - MARKET REPORT
August 20, 2014
SALES COMMENTARY: July sale numbers on the Toronto Real Estate Board confirmed what we have been saying since April, that 2014 will probably be a record sales year. That is not as big an accomplishment as many would have you believe. The previous record for sales was in 2007. The market is simply waking up to the fact that there will be no market correction for the foreseeable future. For July, overall sales were up by 10% over last year and were the second best July numbers on record. Condo sales were even better. They were up by almost 14%. The downtown condo market lead the pact with sales up by 19% and the Etobioke condo market was just behind at 18%. While new condo listings downtown were up by 13%, the ratio of sales-to-new-listings for July increased by 2% to 46% in 2014 from 2013 – a number that ...
Market Report July/August 2014
July 14, 2014
[caption id="attachment_858" align="aligncenter" width="450"] Market Report July / August 2014[/caption] Sales Commentary June was another excellent sales month on the Toronto Real Estate Board. Sales were up by 15% over June of last year. We were looking for 10,500 sales but we only reached 10,180. On a year-to-date basis, sales are just under 49,000. Historically the first half year usually represents 55% of annual sales. Given the slow start to the year with severe weather, the number is probably closer to 52%. On that basis, we are looking at year-end sales of 90-94,000 units which would make 2014 either the best or second best year on record. The condo market outperformed the overall market with sales up by 20% over June of 2013. Downtown condo sales were ahead by 21%. It is true that more new condo listings came on the downtown market this June – 9% more. However the ...
March/April Market Report
March 26, 2014Canadian Condo Market Canadian Real Estate Toronto Condos Toronto Condos Update Toronto Real Estate Market Forecast
SALES COMMENTARY: February sales results from the Toronto Real Estate Board were almost identical to January. And for the first two weeks of March, results are eerily similar. It seems like we are just treading water because of the harsh weather. Overall sales in February were up by 2% over February of 2013. New listings were off by 1% from February of last year and active listings are now 12% lower than this time a year ago. For the first two weeks of March, sales are unchanged from the same time period last year and new listings are off by 10%. Bad weather and a lack of listings (not a lack of buyer interest) have certainly hampered the market. Surprisingly, the condo market is outperforming the overall market. In February sales were 10% higher than a year ago. For downtown condos, the sales increase was even greater – up by ...
JANUARY 2014 - MARKET FORECAST
January 9, 2014
2014 MARKET FORECAST FOR TORONTO and the CONDO MARKET Every year we like to review our last year’s forecast (unlike those who keep calling for a market correction). Just recall the MacLeans Magazine Cover and the words “Inside the Great Real Estate Crash of 2013”. In contrast we predicted only a ‘market pause’ with a return to a more normal market, and with 2013 outpacing 2012 in the latter half of the year. So why are we able to do a better job of forecasting? The answer is that we live and work in this market. It is not just numbers but also people and we take the pulse of our agents and their clients. If you live outside of Toronto, you really don’t know the Toronto market. You will note that we never make forecasts about the Canadian Real Estate Market (there is no such thing) or any other ...
WHERE ARE THE MULTIPLE OFFERS IN THE TORONTO MARKET?
December 16, 2013Toronto Real Estate Market Forecast Mortgage Regulations City Land Transfer Tax CHMC real estate prices 2013
The media tends to sensationalize multiple offers – especially when the sale price goes a hundred thousand over list. The truth is, very few properties experience a bidding war, except for one particular property type. That property type is a resale freehold (you own the land and structure, so it can be a semi, row or detached house) located within the 416 area code. With more and more people wanting to live downtown, there is already an existing built up demand. Finally, it must be listed at and sold for less than a million dollars! So why is this type of property in such high demand? Again we can thank all levels of Government for interfering with market forces. First the City of Toronto introduced a second land transfer tax, payable by the buyer. You would think it would slow buyers down. Just the opposite. It has abnormally reduced the ...
THE FOUR BASIC RULES FOR INVESTING IN REAL ESTATE
November 12, 2013
Real estate investing does not need to be complicated. If you just follow these four basic rules, you can become financially secure. You need to own your principal residence as soon as possible. It is almost impossible to ‘time’ the market but the longer you own, the more your property will appreciate. It is exactly the same theory as investing for your retirement, the sooner you start, the more your money will compound and grow over time. If you cannot afford to carry the property you want, rent out a portion of the property or take on a roommate to help with the mortgage. One of our agents owns a two bedroom condo and has a roommate that pays rent. It’s easy. Never buy a rental property that does not have positive cash flow. If you have to feed the fire every month, you will end up having to sell ...
THE SECOND OR CITY LAND TRANSFER TAX IMPACTING SELLERS NOT BUYERS
October 12, 2013
There is no doubt that the real estate market within Toronto (416) has been slowed – sales noticeably lower than those in the 905 area. Most experts think the reason is that Buyers are opting to purchase in the suburbs to avoid paying the second land transfer tax. NOT SO! The lack of sales is being caused by Sellers! Many Sellers are not putting their property up for sale but instead are renovating rather than moving. Do the math: buying a new property for $800,000 will cost over $24,000 in Double Land Transfer tax. Add on legal fees, moving costs, real estate commissions, and utility changes and the final bill will be over $50,000. Imagine if one did not move but spent the same money on renovations. And that is what is happening more and more. When a freehold property (for those outside of Toronto it means any residential property ...
HOW CAN YOU TELL IF REAL ESTATE PRICES ARE TOO HIGH?
July 10, 2013
All the experts – read the OECD, The Economist, and several U.S. Hedge Funds believe that there is a fixed relationship between average family income and residential real estate prices. That’s why they believe that Canadian real estate and in particular the Toronto Condo Market is way over priced! So we decided to test that theory just within Canada. We found that the median family income in Toronto is lower than just about any other city in Ontario – Brantford, Peterborough, etc. On that basis, Toronto should have the LOWEST prices of any market. Instead they have the highest. Why? First there are a lot of non- resident buyers in Toronto and they do not factor into the income stats. Secondly, we question the accuracy of the income numbers supplied by Stats Canada through Revenue Canada. When you have a salaried position it is very easy to track. In Toronto ...