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July 2022 Toronto Real Estate Market Report

For the fourth consecutive month the Toronto and area resale housing market produced declining sales and lower average sale prices. The housing market peaked in February for average sale prices, in March for monthly reported sales. In February the average sale price for the greater Toronto area came in at an incredible (and unsustainable) $1,334,000. Sales in March hit 10,881, which was not a record. The record for March sales was achieved in 2021 when an unbelievable 15,627 homes of all types were reported sold.


In July the average sale price came in at $1,074,754, a 19 percent decline compared to February’s peak. It should be noted that July’s average sale price was still 1.2 percent higher than July 2021’s average sale price of $1,061,724. Sales in July were more than 47 percent lower than a year ago. There were 4,912 properties reported sold throughout the greater Toronto region. Last year 9,339 homes were sold. Compared to the 10,881 properties reported sold in March, sales in July have declined by almost 55 percent.


There is no mystery as to why the market has changed so dramatically in such a very short time period. The housing market, not only in Toronto and surrounding areas, but universally in North America, was supercharged by pandemic forces (the need for space and safety and the ability to work remotely) and historically cheap money. Money is no longer cheap and with society returning to a form of normalcy, the housing landscape is, compared to February and March and all of 2021, unrecognizable. The Bank of Canada’s benchmark rate is currently 2.5 percent. In March it was only 0.25 percent. In only four months it has increased by 900 percent! Mortgage interest, rates have correspondingly also increased (although not as dramatically) from approximately 2 percent in March to close to 6 percent today. With the inflation rate in Canada at about 8 percent, it is anticipated that when the Bank of Canada meets in September, another rate hike is expected.


Contrary to the commonly accepted view, the declining average sale prices that the market is experiencing are not making housing in the greater Toronto area any more affordable. In fact, rising financing costs are making buying a home in Toronto less affordable. A recent Ratehub study has indicated that with the stress tests and the higher borrowing costs, a buyer in Canada needs $18,000.00 more in household income per year to buy the average priced house than they would have required in February when the average sale price was $1,334,000. That number is even higher in cities like Toronto and Vancouver.


Two market sectors in the City of Toronto are, to some degree, operating contrary to overall market conditions. Firstly, condominium apartments. Notwithstanding declining average sale prices, condominium apartments continue to sell for strong prices. Overall condominium apartment prices were 7 percent higher than last July – 12 percent higher in the 905 region and 4.3 percent in the City of Toronto. The explanation is obvious. In an increasingly unaffordable housing market, condominium apartments remain the most affordable housing type. In July the average sale price of all condominium apartments sold was $719,000, somewhat higher at $744,000 in the City of Toronto.


Secondly, the City of Toronto’s eastern districts. In July all properties in Toronto’s eastern districts sold in only 15 days and for 102 percent of their asking price. The overall market saw properties selling at 99 percent of their asking price. Also, all eastern district properties sold after only 15 days on the market. This compares very favourably with the 20 days it took properties to sell in the overall Toronto and region marketplace. The explanation for this market phenomenon is less clear. It isn’t price. The average price for all properties sold came in at $1,014,000, marginally less than the overall average sale price of $1,019,000 for all City of Toronto properties reported sold. It would appear that the eastern districts, particularly Riverdale, Leslieville, and the Beaches, are viewed as more desirable than other parts of the City by buyers.


Looking forward we should anticipate that this cycle of declines in sales and average sale prices to continue, however not as dramatically as the declines we have experienced since February and March. Until inflation stabilizes and the Bank of Canada stops increasing its benchmark rate the prevailing housing landscape will remain unchanged.

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June 2022 Toronto Real Estate Market

Not unexpectedly June produced a substantial negative variance when compared to the numbers that the Toronto and Region residential resale market produced in June of 2021. Rising mortgage interest rates have over the last three months caused sales to drop fairly precipitously, and although sales prices are off from their high of February of this year, they remain higher than average sale prices achieved last June. 

In June 6,474 properties were reported sold, a 41 percent decline from the 11,053 properties reported sold last June. The average sale price came in at $1,146,254, more than 5 percent higher than the average sale price of $1,088,991 achieved last June. Having said that, a review of what’s been happening since February, both as to sales and average sale price, gives a more accurate description of where the Toronto and Region residential sales market is going. 


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As the above-noted chart indicates, since February the average sale price has declined by $185,000, or 14 percent, and since March, sales have declined by more than 40 percent. These declines can be charted in direct relationship to the increase in mortgage interest rates. Although declines in both sales and average sale prices will continue as the Bank of Canada raises its benchmark rate in its effort to fight inflation, those declines will be more moderate going forward, unless the Bank of Canada raises rates so high that it tips the Canadian economy into recession.



Interestingly, June’s numbers continue to demonstrate that the demand in the Toronto and Region resale market has not dissipated with rising mortgage interest rates. In June, all properties (on average) sold in just 15 days, only 2 days more than the 13 days it took last year. (This number may not be entirely accurate since it does not reflect properties that were listed and cancelled, then relisted at a lower price). Also, all properties reported across the region sold for 100 percent of their asking (also not an entirely accurate number) and in the City of Toronto at 101 percent of their asking price.


Regardless of the precise accuracy of these numbers they clearly demonstrate that there are many buyers in the marketplace searching to buy homes. As more immigrants settle in the greater Toronto area the demand will continue to grow and create the same market pressures that manifested themselves before and during the pandemic. They won’t be fully apparent until the Bank of Canada has inflation under some control and mortgage interests rates stop rising.


It should be noted that whereas during the pandemic (not that it is no longer with us) properties in Toronto’s 905 region sold faster and at higher prices than homes in the City of Toronto. That pattern has been reserved. As health and travel restrictions have eased, buyers are no longer looking for the space and safety that ground-level properties in the 905 offered. In June every housing type in the City of Toronto – detached, semi-detached, townhouse, and condominium apartments – achieved average sale prices substantially higher than corresponding counterparts in the 905 regions. Secondary markets – markets within 200 kilometers from Toronto – are similarly experiencing downturns both in average sale prices and sales.


The number of new listings coming to market will also have a substantial impact on both sales and average sale prices. In June 16,347 new listings came to market. This compares favourably with the 16,193 that came to market last year. However, due to declining sales, we enter July with 16,093 properties available to buyers, 42.5 percent more than June last year. If this continues buyers will have more choice, sale prices will be negotiated in the buyers’ favour, and more properties will languish on the market until they are sold or the listings cancelled.


Early indications in July are that the slide in sales and average sale prices will continue. Buyers are waiting to see how high the Bank of Canada will raise rates, and as a result how much lower prices will drop.


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April 2022 Toronto Real Estate Market
As forecast, the rising mortgage interest rates (not to mention other factors at play, like the war in the Ukraine, inflation, and ongoing supply chain problems) had a direct impact on the number of residential properties reported sold in April. At the end of April, the five-year fixed mortgage rate was 4.19 percent. In February the five-year rate was 2.79 percent, an increase of more than 50 percent in a mere two months. Coupled with the mortgage stress test that all borrowers must undergo when qualifying, it is not surprising that many buyers, particularly first-time buyers, have been forced out of the market. Those who qualify may have had to lower their price-point expectations.


One should not interpret the decline in sales as an indication that the Toronto and area residential resale market is softening or becoming more affordable. Properties sold at lightning speed in April and at strong prices. Prices were lower than the record achieved in February ($1,334,408), but still 15 percent higher than the average sale price of $1,090,414 delivered last year. This April the average sale price came in at $1,254,436, a 6 percent decline from February’s record number.


In April 8,008 properties were reported sold, down 41 percent from the 13,613 properties that changed hands last April. Sales reported in April 2021 remains the second highest monthly total on record, only behind the 15,613 reported in March of last year. It is important to note that since last April’s reported sales, no month has come close to April’s numbers. The best month after April last year was May, reporting 11,903 sales, and 10,939 properties reported sold in March of this year. Most months reported sales well under 10,000. This April’s sales are consistent with reported sales since the record peak early in 2021.


Days on market and sales to list prices are the litmus test of the strength or weakness in the market. April’s results clearly demonstrate the continued strength in the Toronto and area marketplace. In April all properties reported sold, including 2,173 condominium apartments, sold in only 11 days. Depending on housing type and location, properties were reported sold in even less time. For example, all detached properties throughout the greater Toronto area sold in only 10 days, while all semi-detached properties sold in only 9 days. Semi-detached properties in Toronto’s eastern districts continued to amaze, selling in only 7 days.




Not only did all properties sell at the speed of light, but they did so at prices substantially higher than their asking price. All properties were (on average) sold at 107 percent of their asking price. In the City of Toronto, sales came in at 108 percent of their asking price, including condominium apartments. In Toronto’s eastern districts all properties sold at 113 percent of their asking price.


The clearest indication that the Toronto marketplace has not weakened and has not become more affordable is the performance of the condominium apartment sector. In April 2,173 condominium apartments were reported sold, 65 percent of them in the City of Toronto. The average sale price for all condominium apartments sold was $780,000. In the City of Toronto, the average selling price was $820,000, and in Toronto’s central districts, where 64 percent of all condominium apartment sales take place, the average sale price came in at an eye-popping $881,451. With average sale prices well above $1,000 per square foot, a buyer should expect substantially less than 800 square feet of living space for $881,451.


Rising mortgage interest rates should not cause market observers to lose focus on the fact that resale inventory levels remain historically low. In April months of inventory were only 0.9 for the entire greater Toronto area, and as in the case of days on market and sale to list price performance, even less depending on location and property type. Last year’s months of inventory were 1.3 months. With large numbers of immigrants making their homes in the greater Toronto area, the demand side of the market will continue. Almost 50 percent of more than 400,000 immigrants coming to Canada in 2021 relocated in Ontario and the greater Toronto area.


As we move into the late spring and summer months, and as interest rates continue to rise, we can anticipate negative variances compared to corresponding months in 2021. Notwithstanding these variances, and as this report has pointed out, the resale market will remain strong and as unaffordable as it has been since the beginning of the pandemic.

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March 2022 Toronto Real Estate Market

In the face of daunting obstacles, the Toronto and area residential resale market produced stellar results, albeit not the stratospheric results achieved during the same period last year. In the face of rising interest rates, the war in Ukraine and its global consequences, government legislation primarily directed against foreign buyers and investors, and a desperate lack of inventory, the Toronto and area market produced the third-best March and the second-best first quarter on record.

  

Any comparison with March 2021 is almost pointless. During the first quarter of 2021, the resale market was being driven by the frenzy of the pandemic, causing indiscriminate buying, particularly in suburban and secondary markets. Even without all the obstacles, the market is currently experiencing that level of activity was unsustainable.

  

In March, 10,955 properties were reported sold, almost 30 percent fewer than March of last year, but as indicated above, still the third-best March on record. As a clear demonstration of how strong the market was in March, the average sale price came in at $1,300,000, not far from the record price of $1,334,328 achieved just last month. March’s average sale price is almost 20 percent higher than the average sale price of $1,097,351 achieved last year.


Given rising mortgage interest rates, it is not surprising that average sale prices have plateaued. The trend of constantly rising average sale prices is at an end and will stay steady until the current cycle of rising interest rates is at an end. Rising rates have the immediate effect of removing fringe buyers (often first-time buyers) from the market and lowering the price-point expectations of others.


If there was any doubt about the strength of the Toronto and area marketplace, two statistics dramatically prove the opposite. In March, all properties that hit the market (on average) sold in only 8 (unbelievable!) days. To emphasize this point, all 10,955 properties that sold in March were listed, marketed, negotiated, and sold in only 8 days. Even last year during Toronto’s strongest market in history, it took 10 days for all properties to be sold.



Not only did all properties sell in only 8 days, but they sold for an eye-popping 113 percent of their asking price, and this included 3,154 condominium apartments. In Toronto’s eastern trading districts all properties sold at 121 percent of their asking price. If a buyer were to go further east into the Durham region they would find that all properties that hit the market in March sold for 123 percent of their asking price. Semi-detached properties in Toronto’s eastern districts close to the central core continue to defy all market obstacles selling at almost 130 percent of their asking price. These statistics do not reflect a weakening market.


Despite the obstacles faced by the Toronto and area market, the growth in average sale prices was stronger in the 905 region as compared to growth in the City of Toronto. This continues the pattern that started during the pandemic, where less expensive homes offering more space were available.



Overall prices in the City of Toronto increased by 15.8 percent and by almost 27 percent in the 905 region.



High-end luxury properties continue to sell well. In March 1,165 properties having a sale price of $2 Million or more were reported sold. Year-to-date 2,841 properties in this price category have been reported sold, 93 percent of these sales being detached properties in the City of Toronto and the 905 region. Last year only 982 properties were reported sold in this price category.

  

As the market moves into April, supply shortages continue to be a problem. In March a little over 20,000 new properties came to market, almost 12 percent fewer than the 22,747 that came to market last year. As we enter April, buyers’ choice remains limited. At month end there were 10,167 available properties for sale, down over 4 percent compared to the 10,603 available last year. Based on the pace of sales, there were only 0.9 months of inventory in the entire greater Toronto area. The supply was marginally better in the City of Toronto, primarily because of the availability of condominium apartments, coming in at 1.1 months of inventory. Given the population of the greater Toronto area (approximately 6.7 million) a healthy, balanced market requires at least 20,000 properties monthly on a continuous basis available to buyers.



Inflationary pressures resulting in increasing mortgage rates and continued government intervention in the resale marketplace will mean that the months to come will be similar to what we saw in March. Average sale prices will stall, which is welcome, and sales numbers will trend downward as compared to 2021. Without a large increase in supply, which is less than likely, even under these contradictory market forces, it will remain a seller’s market, but with less demand and fewer buyers competing for the same properties.

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February 2022 Toronto Real Estate Market

It’s now official, the most expensive city in Canada, at least from a housing perspective, is Toronto. February’s resale market performance pushed Toronto prices to new records, breaking records achieved only last month in January.


In February the average sale price for all properties sold, including the sale of 2,772 condominium apartments, came in at an eye-popping $1,334,544, almost 28 percent higher than the $1,044,957 achieved last February, and more than 7 percent higher than the record of $1,242,760 realized in January. Toronto and area housing prices are now more than 60 percent higher than they were at the beginning of the pandemic.


The reasons for this unbelievable increase in prices have been historically low interest rates, a lack of supply, continued growth in population (in 2021 the population of the greater Toronto area is estimated to be 6.4 million, which means that more than 1 in 6 Canadians live in the region) and the fact that there is now a prevailing view that a home is not merely bricks and mortar, where families live and grow, but the most important asset in the accumulation of wealth. The asset valuation affect at play is very similar to why people invest in the equities market, particularly when interest rates are exceptionally low, as they have been.


Given that supply is low, it is not surprising that sales in February were lower than February last year. This year 9,097, a strong number by historical standards, but almost 17 percent less than the 10,929 sales recorded in 2021, all due to supply and lack of inventory.


In February 14,147 new properties came to market, a sharp improvement from the 7,979 properties that came to market in January, but almost 7 percent fewer than the 15,146 new listings that became available to buyers last year. Consequently, heading into March there were only 6,985 available properties in the entire greater Toronto area, 20 percent fewer than at the same time last year. These are critically low numbers. To put these numbers into perspective, the available inventory today is only about a third of what was available at the beginning of 1997. With 430,000 new immigrants expected in 2022, many of whom will end up in the greater Toronto area, there is no immediate relief expected.


Average sale prices continue to be higher in the city of Toronto as compared to the 905 region, but as has been the pattern since the beginning of the pandemic, the gap between the two is narrowing.



In every category records were broken. Of particular note are the prices of detached houses in the city of Toronto, which broke the $2 million barrier. As eyepopping as this number is, in Toronto’s central trading areas the average sale price for a detached properties almost hit the $3 million mark, coming in at $2,952,369. Condominium apartment sales, what used to be the city of Toronto’s least expensive housing form, also broke records with an average sale price of $863,210. Just before the pandemic, the average price for all properties sold in the greater Toronto area was a shockingly low $819,043!


In a month that was full of new records, the time that available properties spent on the market before being reported sold can only be described as startling. In February all properties (on average) that hit the market were reported sold in only 9 days. Single digit time periods on the market have been the norm in some trading areas, but never for the entire greater Toronto area. There were 2,772 condominium apartments sold in the greater Toronto area, 1,842 of them in the city of Toronto. They all sold after spending only 11 days on market. There are no longer any meaningful superlatives to describe what is happening in the greater Toronto marketplace.


As we move into the month of March, the burning question is, will rising mortgage interest rates dampen this unprecedented marketplace? The answer to this question depends on how high and how quickly the Bank of Canada raises is rates. Its initial increase on March 2nd was only 0.25 percent, bringing the Bank rate to 0.5 percent. This increase was modest. Given all the other forces that are driving the Toronto and area marketplace, the impact on the residential resale market will be negligible and in fact may have a FOMO (fear of missing out) affect, driving people to buy now before rates get higher in the future. If rates continue to rise to pre-pandemic levels, in conjunction with the record prices for housing now at play, there is little doubt that home prices will plateau. For prices to come down, the downward asset valuation effect would need to be dramatically stronger than the overwhelming upward pressure on the house prices generated by population growth and the prevailing lack of supply.

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January 2022 Toronto Real Estate Market

There were a few surprises and once again a number of new records established by the Toronto and area residential resale market in January.


First, and very noteworthy, was the average sale price for all properties reported sold. It came in at an eye-popping $1,242,793, surpassing the previous record of $1,163,210 achieved in November of last year. By contrast, last January the average sale price came in at only $966,068, a year-over-year increase of almost 30 percent. This is not supposed to happen in January, historically a quiet month, and it happened during a snow filled month making access to properties extremely difficult.


As has been the case throughout the pandemic, the increase in the Toronto and area average sale price was 905 driven. As the chart below indicates, year-over-year price increases in Toronto’s 905 region averaged almost 34 percent and only 24 percent in the City of Toronto.

As a result of these increases, the 905 has dramatically reduced the gap in housing prices between the City of Toronto and the 905 region. With more people working from home and needing more interior and outdoor space, this pattern will continue throughout the foreseeable future.


A trend that began in the second half of 2020 has now become common place, namely the disparity between list and sale prices. Throughout the entire Toronto and area marketplace all properties sold for 113 percent of their asking price, including 2016 condominium apartments. The most startling disparity was the reported sale of semi-detached properties in Toronto’s eastern districts. All semi-detached properties throughout the eastern districts sold for 127 percent of their asking price, and astoundingly in the neighbourhoods of Riverdale and Leslieville the sales to list ratio was 134 percent, another market record, and a buyer’s nightmare. This discrepancy will only get worse. At the beginning of February there were only 26 active semi-detached property listings for the entire eastern trading area.


The luxury market has also undergone a major transformation over the past few years. In January, 590 properties were reported sold with a sale price of $2 Million or more. This compares with only 331 in January 2021, 130 in 2020, and a mere 76 in 2019 – a 676 percent increase in three years. This is also, no doubt, a record. Clearly the definition of “luxury” will have to be redefined.


The other end of the market spectrum, condominium apartment sales, continue to increase in price. A year ago, condominium apartment sale prices in the city of Toronto resulted in a negative variance, down 8 percent compared to 2020. This January condominium apartment prices rose by almost 22 percent to $760,643. But the real story is in Toronto’s central core. In January, 966 apartments were reported sold with an average sale price of over $800,000. Considering that central core sales account for almost 70 percent of all City of Toronto apartment sales, what used to be the most affordable housing type is starting to become quite pricey. What’s worse is that in one year the available supply of condominium apartments has declined from 2,360 to 1,095, a 53 percent decrease.


Supply generally will be the driving – rather inhibiting – market force in 2022. Supply was at an all-time low at the end of 2021, with no improvement in January. January saw 7,979 properties come to market, a decrease of almost 16 percent compared to the 9,438 that came to market last year. As buyers venture into the February market only 4,140 available properties await them, a 44 percent decline compared to the 7,396 (also extremely low) available last year.


With this shocking low level of supply, it is not surprising that reported sales were down in January compared to last year. There were 5,636 sales in January, down over 18 percent compared to the 6,888 property sales last year. Notwithstanding this negative variance, it must be remembered that January’s numbers are very robust compared to what used to happen in January before the pandemic. For example, in January 2020, the month that Covid-19 became part of our vocabulary, only 4,546 sales were reported, and the year before that only 3,968.


Looking ahead all eyes are on the Bank of Canada and when it will raise interest rates. Given the level of demand and the lack of supply the impact of higher mortgage interest rates will likely be moderate. Those buyers struggling to qualify today will be forced out of the market, especially first time buyers, but for every one of them there are still many who are intent and capable (if they can find one) on acquiring a house.


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December 2021 Toronto Market Report

In 2021 we experienced an unprecedented residential resale market. More records were shattered in 2021 than in any other year of record keeping – sales prices, properties sold, and, unfortunately, inventory levels all established new records. As we end 2021 and move into 2022, it will be inventory that will have the greatest impact on the resale market.


Let’s begin with December’s data.

Sales declined in December as compared to 2020 only because of a lack of inventory. Demand continues to be at record breaking levels, but to put it bluntly, there just weren’t enough properties on the market for buyers to purchase. That is dramatically illustrated by the fact notwithstanding declining sales, the average sale price for all properties sold, including condominium apartments, came in at $1,157,849, 24.2 percent higher than December 2020.


It should be noted that increases in average sale prices were substantially higher in the 905 region as compared to price increase in the City of Toronto, as the chart below clearly illustrates.




The increase in average sale prices in the 905 region during the pandemic has been nothing but stunning. As forecast in a monthly Market Report earlier in 2021, the difference in average sale price between properties in the City of Toronto and the 905 region has all but disappeared. The reasons for this market change are due to the pandemic driving buyers away from the denser concentration of population in the City of Toronto, the ability to work remotely, affordability, and supply. It would now appear the attraction of supply and affordability may no longer exist.


The luxury end of the resale market also broke records in 2021. In December 473 properties traded hands having a sale price of $2 Million or more. Last year only 287 properties sold in this price category. On a year-to- date comparison, 7,807 properties valued at $2 Million or more sold in 2021 compared to only 3,649 last year, an increase of 114 percent. Sales in the 905 region in this category contributed substantially to this increase in 2021. Detached property sales in Oakville, King, Richmond Hill, Whitchurch-Stouffville and Uxbridge all came in with average sale prices in excess of $2 Million, with King approaching an average sale price of $3 Million. Historically this only happened in central Toronto.


Throughout the greater Toronto area average sale prices continued to be eye-poppingly higher than asking prices. This is also a strong indicator of demand, first witnessed after buyers adjusted to the protocols of viewing and buying properties during the first wave of the pandemic in May and June of 2020. For example, in Oshawa, all properties presented to the market sold in only 9 (yes 9!) days at sale prices 121 percent of their asking price. The case was the same in Pickering. Two trading areas in Toronto also exceeded sale prices of 120 percent or more than asking prices. We are short of superlatives to describe this phenomenon.


In 2021, the condominium apartment sector came back very robustly after pandemic fears in 2020 caused it to shrink dramatically. With that revived interest in condominium apartment living came rising prices, and perhaps most shockingly, the disappearance of condominium apartment inventory. In central Toronto, where most condominium apartments are located, 977 sold in December, last year over 1,000 apartments sold in the same trading area. The decline was due to lack of supply. On the price side, those 977 condominium apartments sold for $790,611, almost 20 percent higher than last December’s average sale price of $669,000.


The decline in condominium apartment supply over the course of 2021 has been breathtaking. In December of 2020 there were 4,294 active condominium apartment listings in the greater Toronto area, and 3,120 in the City of Toronto, the bulk of those to be found in the central core of the city. As 2021 comes to a close, there were only 1,488 active listings in the entire greater Toronto area and a paltry 1,189 in the City of Toronto, 20 percent fewer than the 1,447 condominium apartments that sold in December! The only source of affordable housing is disappearing.


Overall, 2021 proved to be the strongest year in recorded resale history. Total number of sales for the year came in at 121,712 surpassing 2016, the previous best year, by more than 7 percent. In 2016 113,040 properties traded hands. During 2021, except for January ($966,068) every month saw the average sale price exceed $1 Million, with November setting a new record at $1,163,287. A truly exceptional year!


How the market performs in 2022 will depend entirely on supply. December’s numbers are not encouraging. During December 5,174 new properties came to market, almost 12 percent fewer than came to market in 2020. What is even more shocking is the fact that entering 2022 there are only 3,232 active listings for the entire greater Toronto area, more than 46 percent of which are condominium apartments. By contrast last year there were 7,892 active listings which at the time we reported were totally inadequate to meet the growing pandemic demand.


Many economists have deemed 1996 to be the year that the Toronto and area market broke from its six year recessional slide and began to show signs of strength and robustness that have continued through to today’s market. That year set a record for sales at 55,779. In 1996 the population of the greater Toronto area was approximately 4.2 million people. Since then the population of the greater Toronto area has grown to well over 7 million people. In December of 1996 the Toronto Real Estate Board reported that there were 16,964 active listings available to buyers in the greater Toronto area. At 3,232 active listings this December, we find ourselves with only 1⁄4 of the listings available to buyers in 1996, and we have a lot more buyers.


So supply will be the major driver in 2022. As immigration numbers to the greater Toronto area will continue to increase, even more supply will be necessary. It will take aggressive, innovative, and rapid thinking, planning and decision-making by all three levels of government alleviate this housing crunch.




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November 2021 Toronto Market Report

With one month still remaining in 2021, November’s reported sales brought the total year-to-date sales to 115,716 residential properties sold. We will finish the year with approximately 122,000 sales, eclipsing the previous annual record for properties sold in 2016. In that year 113,040 properties traded hands. As will become evident, given the supply problems the market is experiencing, 2021’s record-breaking accomplishment is not likely to be surpassed for some time, and definitely not in 2022.


In November 9,017 residential properties were reported sold, also a record number for any previous November. Last year 8,728 properties were sold, 3.3 percent fewer than this November. The big news coming out of the November data, aside from the new records achieved, was what’s happening to prices and the region’s disappearing inventory.

In addition to being the strongest November on record, and breaking the annual record for total sales, November saw the Toronto and area average sale price climb into record territory. The average sale price for all properties reported sold came in at $1,163,323, almost 22 percent higher than last year’s average sale price ($955,889). November marks the sixth consecutive month of monthly increases. This streak started in June when the average sale price was a “mere” $1,089,135, 7 percent less than the average sale price for November. The pace of these monthly increases in average sale price began to accelerate in September when it became evident that the Toronto and area supply problem was moving from chronic to dangerous.


The supply problem became even worse in November. Only 10,036 new listings came to market in November, 13.2 percent fewer than the 11,556 that came to market last year. Given the absorption rate – 9,017 properties were reported sold, almost the same number as came to market – combined with the few listings that realtors were able to bring to the market, we find ourselves entering December with only 6,086 properties available to buyers, an eye-popping 56 percent fewer listings (13,798) than at the same time last year.


As unbelievable as these numbers are, depending on housing type and neighbourhood, the situation is even direr. For example, there were trading districts that reported no sales of semi-detached properties for November. The reason no sales were reported is due to the unnerving fact that no semi-detached properties came to market in November in those trading areas.


No surprise that sales of all types of properties were happening at lightning speed. In the City of Toronto, all detached properties were reported sold in just 13 days. Semi-detached properties sold in just 11 days. In the 905 region, all semi-detached properties that came to market in November sold in a mere 8 days with some trading areas reporting sales at an even faster pace. All sales of semi-detached properties in Halton, which includes Burlington, Milton, and Oakville, were processed in only 4 days!


Another milestone that was achieved in November was months of inventory. Given the data in this report, it won’t surprise anyone that for the first time months of inventory for the greater Toronto area dropped below one month. For the entire region, months of inventory came in at 0.9 months. In some trading areas, this number was, unbelievably, even lower. Durham region, which includes Ajax, Uxbridge, Oshawa, and Pickering ended the month with only 0.5 months of inventory.

 
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October 2021 Toronto Market Report

In the September Market Report, five themes that were driving the Toronto and area marketplace were identified. These themes have become prominent during the course of 2021 and it is becoming evident that they will be the key features of the residential resale market for the remainder of 2021 and into the early months of 2022. These themes,

with slight variation, were prominent in the October market data.


1. AVERAGE SALE PRICE

Prior to October, it appeared that the average sale price for all properties sold had plateaued around $1.1 Million, including condominium apartments. In October the average sale price popped up to $1,155,345 (also including condominium apartments), into record territory, and substantially higher than the $968,535 achieved last year, a 19.3 percent increase year-over-year. What drove this unexpected increase? Another key theme, the tension between market demand and supply.


2. DEMAND-SUPPLY TENSION

The demand-supply problem moved beyond critical into a danger zone in October. In October 11,740 properties came to market. That was 34 percent fewer than the 17,806 that came to market last year. Couple that with the 9,783 properties that were reported sold in October, by month-end there were only 7,750 properties in the entire greater Toronto area for sale. Compare that to the 17,313 that were available last year, and it becomes abundantly clear that we are in a dangerously imbalanced zone.


This imbalance will become even clearer when we discuss what’s happening to sale prices as compared to asking prices. With so little supply, and record levels of demand, the problem of lack of supply and affordability becomes acute. Multiple offers are the norm, no longer the exception, and based on the average sale price for October of $1,155,345, buyers competing for the limited number of properties on the market are driving Toronto and area into one of the most expensive cities on the globe.


3. CITY OF TORONTO V. 905

As 2021 winds down to a close, the disparity between the City of Toronto and the 905 region has been dissipating. Beginning in the late spring of 2020, during the height of the pandemic, more and more buyers have been flocking to the 905 region (and to many secondary markets throughout southern Ontario). As 2021 has unfolded, prices in the 905 region have increased dramatically, proportionally faster than those in the City of Toronto, and more recently, the availability of properties for sale has declined to the point where there are now more properties for sale in the City of

Toronto than in all the 905 region.


At the end of October, as mentioned above, there were only 7,750 properties available for sale in the entire Toronto and area region. A closer look indicates that 4,247, or almost 55 percent of those properties were in the City of Toronto. That leaves only 3,503 available properties for sale from Burlington to the west, to Innisfil in the north and to Clarington in the east. This is a vast region. The lack of supply in the 905 region is a product of the pandemic, and buyers’ need and desire to have more space, safety and to satisfy their need for security. The ability to work remotely has fueled and enabled this diaspora, but now the 905 region is without supply and with startingly higher average sale prices.


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At this pace the difference in price, for all housing types, will evaporate. It’s particularly interesting to note the dramatic increase in suburban condominium apartment prices.

*October year-over-year increases.


4. LIST PRICES V. SALE PRICES

In October every trading area saw sale prices come in substantially higher than list prices. For the entire greater Toronto area the average sale prices was 107 percent of the asking prices. This includes all reported sales in Halton, Peel, York, Durham, Dufferin, and Simcoe Counties. Effectively the asking price is a point of commencement, and that’s all. Scarcity, location, demand, and auction style sales, will determine the end price. In various locations the percentage of sale price over ask was even higher. For example, all semi-detached properties in Toronto’s eastern trading areas sold for 115 percent of asking price and in an eye- popping 7 days!


It is not surprising that entering the month of November there were fewer active listings of every type of property, except condominium apartments, than were sold in October. In some trading areas the situation is dire. In the greater Toronto area 878 semi-detached properties were reported sold in October. November begins with only 347 available semi-detached listings. Not much choice for buyers, putting further pressure on both availability and affordability.


5. CONDOMINIUM APARTMENTS

Condominium apartment sales continued their resurgence in October. In the City of Toronto, sales were up by almost 34 percent compared to a year ago. Similarly in the 905 condominium apartment sales were up by almost 21 percent to 986 units. Prices followed the rise in sales, increasing by almost 11 percent in the City of Toronto and by 17 percent in the 905 region. Clearly, buyers have overcome their weariness of living in highrise towers in more dense conditions, or this simply may be due to the fact that compared to ground level opportunities, condominium apartments remain the most affordable housing type and choice.


Like all other housing types, the supply of condominium apartments is declining. At the end of September, there were 3,882 active condominium listings in the greater Toronto area, and 2,918 in the City of Toronto. At the end of October the supply of condominium apartments throughout the entire region had declined by more than 11 percent to 3,440, and by 7.5 percent to only 2,700 in the City of Toronto. The last bastion of affordability and supply is quickly disappearing.


These five themes will sum up the Toronto and area marketplace for months to come. The now more real, looming threat of mortgage interest rates may cause a disruption to these themes. Based on the Bank of Canada’s recent pronouncements we may see rate hikes within the next few months. Rate hikes will have no positive impact on supply, although they will no doubt curb the rising prices that we witnessed in October.

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September 2021 Toronto Market Report

The residential resale market rebounded in September after five months of declines in sales and the lull of the summer months. There were 9,046 sales reported in September, 18 percent fewer than reported last year, but more than 5 percent higher than the 8,580 reported sales in August, the first month-over-month increase since the early spring of this year.


As indicated in our August Report, there are a number of themes that are driving the market, themes that will continue at play for the remainder of this year and into 2022.


1. AVERAGE SALE PRICES

Average Sale Prices for all properties sold have been fairly stable through 2021. The average sale price has been approximately $1,080,000 since February, fairly consistent throughout those months, including the month of March, which saw the market deliver an unbelievable 15,629 sales.


In September, however, the average sale price jumped to a record-breaking $1,136,280: eye-popping because it includes 2,664 condominium apartment sales, which represent 30 percent of the entire market with an average sale price of only $708,000. Needless to say, the average sale price of ground-level property was on fire, with the average sale price for detached and semi-detached properties in the City of Toronto coming in at $1,779,000 and $1,305,000, respectively. The average sale price for the greater Toronto area will continue to rise, primarily by what is happening in the 905 Region.


2. CITY OF TORONTO – 905 REGION DISPARITY

In September average sale prices in the 905 Region once again accelerated much faster than in the City of Toronto, as is illustrated in the chart below.



As measured against all property types, the average sale price increased by more than 25 percent in the 905 Region as compared to only 12.2 percent in the City of Toronto (416).


The reason for this disparity is obvious. House prices of all types remain substantially less expensive in the 905 Region as compared to the City of Toronto, however they are catching up.


3. DEMAND-SUPPLY TENSIONS

September has clearly illustrated that demand, throughout the greater Toronto area, is dramatically high, and unfortunately, supply is chronically and historically low. It was no surprise that affordable housing was a key campaign platform for all parties during the recent national election.


At the end of September, there were only 9,191 available properties throughout the greater Toronto area, almost 50 percent fewer than last year. It is not surprising therefore that all properties that came to market in September (on average) sold in only 14 days, and substantially less in some sub-markets; for example, semi-detached properties in the City of Toronto (only 11 days). What is especially concerning is that the available supply in the 905 Region has dwindled dramatically.


In September of the 9,191 properties available for sale, 52 percent of them (4,821) are located in the City of Toronto. Of those 4,821 available properties, 2,918 are condominium apartments. Historically only 30-35 percent of available properties were located in the City of Toronto, the balance in the 905 Region. There is no clearer evidence that the pandemic has caused buyers to look beyond the City of Toronto, where house prices were less expensive and the supply was more plentiful. Not any more.


4. LIST PRICES VS. SALE PRICES

Except for one trading area in the City of Toronto, where the average sale price was $5,625,720, the recorded sale price of all properties sold throughout the greater Toronto area exceed the asking price, on average by 106 percent. This is a first, and it proves that in this market the list price is merely a starting point. No one expects that the end sale price will be equal to or lower than the asking price. This phenomenon is a product of the demand-supply problem. In some trading areas, the end sale price exceeded the asking price by substantially more than 106 percent. For example, all semi-detached properties in Toronto’s eastern trading areas sold for a breathtaking 118 percent over the asking price.


To reiterate, the list price of properties today is only a starting point.


5. CONDOMINIUM APARTMENT SALES

Condominium apartment sales, devastated by the early effects of the pandemic, have come roaring back, and so have their sale prices. In September 2,664 condominium apartments were reported sold across the region, exceeding pre- pandemic sales numbers. Of those 2,664 condominium apartment sales, 1,792 were in the City of Toronto.


As the chart above illustrates prices are following sales. In the City of Toronto, the average sale price increased to $744,730 and to $634,111 in the 905 Region, 8.5 and 18 percent, respectively. In the central core of Toronto, where 1,176 sales were recorded (44 percent of all recorded sales) the average sale price reached $806,242, a record high and the first time the average sale price has exceeded $800,000. Even Toronto’s least expensive housing type is now becoming pricey.


Going forward the five trends that have been discussed in this Report will continue to influence the resale market. Expect sales in October to be even stronger than September, with continued pressure on sale prices due to the lack of available supply.


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August 2021 Toronto Real Estate Report

A number of themes became clear in August, themes that will drive and impact the Toronto and area residential resale market for the remainder of this year and no doubt into 2022.


The first and most important is supply. In August only 10,609 new properties came to market. This contrasts sharply with the 18,599 that came to market in 2020. What is even more shocking is that at the end of August there were only 8,201 properties available to buyers, a 51 percent decline from the same period last year when buyers could choose from 16,662 properties. Available properties were reduced to their lowest level in over a decade. A chronic problem has now become critical.


The critical nature of the supply problem is glaringly evident in certain sub-sectors of the marketplace. At the end of August there were only 337 semi-detached properties available for sale in the entire greater Toronto area. This number is shocking but becomes eye-popping when it is remembered that in August 750 semi-detached properties were reported sold. That means that we enter September with 55 percent fewer semi-detached properties available for sale than the total number reported sold in August. Only the City ofToronto’s central districts have more semi-detached properties available at the beginning of September than sold in the month of August, and only marginally at that.


These numbers make it clear that during the current election campaign, the only housing item on all parties platforms should be supply! Platforms that speak to making purchasing properties easier – ie. longer amortization periods, government assisted loans, reducing mortgage insurance premiums, tax free home buying savings accounts – are misleading at best and reckless at worst. They are blatant, unhelpful, self- serving promises that hope to pave the way to being elected. Supply and ways to achieve it should be the only words uttered by politicians at this time.


The second theme that emerges is the disparity between the 905 region marketplace and the City of Toronto (416). The pandemic and its impact on the house buying consumer has been dramatic. Before the pandemic house prices (on average) were lower in the 905 than in the City of Toronto, nor did house prices rise as quickly in the 905 region. That has all changed.


In August the average sale price for the 905 region was more than $1,050,000. In the City of Toronto it was $1,000,000. Prior to the pandemic these differences were reversed. Also, the increase in average sales prices was more startling in the 905 region than in the City of Toronto. In the 905 region detached properties increased in value by 26 percent, semi-detached by 21 percent, townhomes by 20 percent and even condominium apartments increased by almost 15 percent. By contrast in the City of Toronto detached properties only increased by 11 percent, semi-detached by 4 percent, townhouses by 8 percent, and condominium apartments sales prices by 7 percent.


The explanation is three fold. Firstly there is less supply in the City of Toronto, except for condominium apartments, house prices are still pricier in the City of Toronto, and the pandemic, which has intensified the need for space and safety, coupled with the ability to work remotely, has driven buyers to the suburbs and secondary markets.


The third theme that has emerged is the plateauing of average sale prices. Yes, August’s average sale price of $1,070,911 for all properties sold was 12.6 percent higher than the average sale price achieved in August 2020 ($951,219), but it has steady declined since May’s stratospheric record breaking average sale price of $1,108,362 and has stabilized at approximately $1,073,000.



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Without a mortgage interest rate decline, which is unlikely, or massive increase in household incomes, also unlikely, consumers have reach their maximum housing purchasing power, outliers excluded.


The last theme that is emerging is the resurgence in condominium apartment sales. During the early months of the pandemic condominium apartment sales and prices collapsed. The density of condominium living and fear of the Covid-19 virus drove consumers to ground level properties, especially in the suburbs and secondary markets. Not only were properties less expensive in the 905, and in secondary markets, those prices got consumers more space and the psychological benefit of safety.


August’s results have made it clear that the condominium apartment market is back. In the City of Toronto condominium apartment sales increased by more than 13 percent. Almost 1,740 apartments traded hands, representing almost 58 percent of all properties reported sold in the City of Toronto in August. All condominium apartment sales took pave in only 21 days at 102 percent of their asking price. In Toronto’s central districts, where most sales take place, the average sale price came at $783,712, a number beginning to exceed pre-pandemic levels. Not only are condominium apartment sales robust, but on the supply side they are practically the only game in town. At the end of August, there were 3,577 condominium apartments available to buyers. This, shockingly, represents 44 percent of the total available supply of 8,201 properties of all types.


These themes – supply, disparity between the 905 and City of Toronto marketplaces, the stabilization of average sales prices, particularly in the City of Toronto, and the resurgence of the condominium apartment market – will play out in September, similarly to how they did in August. The result will be sales results and average sale prices similar to what were achieved in August.


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July 2021 Toronto Real Estate Report

In some ways the July resale market’s performance was anticlimactic. We could see it unfolding in June, and as a result, there were few surprises. Sales continued their decline – in June 11,106 properties were reported sold, dropping to 9,390 in July, but still a strong month by historical standards. The record for reported sales was established last July at 11,081. At the end of the day there are only so many buyers in our given geographical area, and since the beginning of 2021, almost 80,000 properties have changed hands, a pace that will see at least 120,000 sales take place by the end of the year, shattering the previous record of 113,400 sales achieved in 2016.


All market indicators continue to point to a very robust market. The market’s slow down is due to absorption, seasonal change, and with higher vaccination rates and declining social restrictions consumers are focusing on activities other than buying and selling real estate. In addition, even if there was no change in buyers’ attitudes, there simply isn’t enough inventory in the marketplace. In July only 12,551 properties came to market, 31 percent fewer than the number that came to in market last July. As we enter August there are only 9,732 properties available for sale in the entire greater Toronto area, more than 35 percent less than were available last year (15,018).


The sales that took place were at lightning speed. In July all 9,390 reported sales took place (on average) in only 15 days. Last July, which was a record-breaking month, they took place in 17 days. These sales also came in at record-breaking average sale prices. In July the average sale price for all properties sold was $1,062,256,

12.6 percent higher than last July’s average sale price ($943,594).


A closer examination of July’s average sale price indicates the growth in sale prices is taking place in Toronto’s 905 region, and very moderate price growth in the City of Toronto, as the chart below clearly indicates.



The reason for this dramatic differentiation is twofold. Firstly, prices for homes in the 905 region are substantially lower than in the City of Toronto. Affordability is very much at play in the decision-making of buyers. Secondly, the need and desire for more space and perceived more safety, continues to drive buyers away from dense areas in Toronto to the less crowded suburbs. Of the 9,390 reported sales in July, 6,121 traded in the 905 region, or more than 65 percent. This trend is not likely to end soon.


Overall, the high end of the market continues to perform very strongly. In July 521 properties having a sale price of $2 Million or more were reported sold. Last year only 452 properties were sold in this category of homes. It is amazing to look back to 2019. In that year only 185 properties were bought and sold having a sale price of $2 Million or more. In just two years the number of high-end properties sold has increased by an eye-popping 182 percent.


Condominium apartment sales have continued to strengthen over the last few months, particularly in the City of Toronto, where the availability of most condominium apartments is located. In fact, in July condominium apartments were the only housing type that saw year-over-year growth, with detached, semi-detached, and townhouse sales all producing negative variances compared to July of last year. Condominium apartment sales were up by 4.2 percent.


July saw the first overall negative variance in sales in 12 months. Again, it must be remembered that reported sales in July 2020 were record-breaking. Last July 11,033 properties were sold, this year 9,390. July was the fourth straight month of declining sales, which as discussed in our June market report, was anticipated, for reasons already stated – absorption, affordability, lack of supply, and historic seasonal adjustment. Early indications are that this trajectory will continue into August, and for the same reasons. Last August 10,738 residential resale properties were reported sold. This August we will see close to 8,500 properties trading hands. This does not mean that the market is softening. In 2019, which was a solid resale year, 7,682 properties were reported sold. What we are witnessing is the resale market slowly morphing back to pre-pandemic patterns.



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