Our Company has been selling condos for over a decade in Toronto. Looking back, everyone believes that the condo market has gone straight up and the good times just rolled on – uninterrupted.
However nothing could be further from the truth! When we look back, there were a lot of market changes that impacted the Toronto condo market. At the start of the decade there was the High Tech Crash or bubble. You remember all those start up companies selling for millions. Toronto has over 30% of the High tech business in Canada and a lot of it is centred downtown. There were big job losses at the time.
Then there was 9/11 in New York. Afterwards no one wanted to live or work in a high rise building or condo. That too impacted our condo business for a period of time.
Next we had SARS in 2003! That was a type of flu and people were afraid to leave their houses. For a three month period, no one would come to Toronto either. Buyers refused to enter properties owned by persons of Asian descent and our market just died during the period.
Announced in 2007, the City of Toronto introduced a second or City Land Transfer Tax for February of 2008 and everyone thought that after that date, buyers would only look at the 905 region. Sales dropped again.
Then we had the Banking crisis and stock market meltdown later in 2008. No one would buy. And there was a 10% price correction over 9 months.
In July of 2010, we had the introduction of the HST (harmonized or a combined provincial and federal sales tax) on new construction and real estate services. Again the market slowed noticeably after that date.
Today we have the Euro Debt Crisis in several countries, and the Debt Ceiling problems in the U.S. with the fear that any defaults could trigger a move away from U.S. dollars. Just another reason for people to postpone their buying and selling decisions.
In summary, what is truly amazing is how resilient our condo market has been over the past decade. Why does it keep bouncing back? The primary reason is the underlying economic fundamentals have not changed. More and more people want to live downtown – young and old. As well, Toronto continually has almost 100,000 people moving here each year and they need a place to live. Looking forward, the Toronto condo market will continue to grow and yes there will be setbacks along the way.