How Is This Possible?
How is it possible that our real estate market has made leaps and bounds into recovery?
We are scratching our heads. How can such a significant price correction happen after lending rate increases not seen in a generation happen, followed by a swift improvement in the market? Do you think this is sustainable? Why does the mini-cycle of 6 months of correction followed by a flat period lead to a swift uptick over the last 25 years?
Whatever happened to the Toronto real estate markets in the 70s, 80, and 90s? The eras of value decile for up to a decade at a time. If we look at the correction that began in 1989, we didn’t actually know the bottom for six years. Yes, you read that correctly. We only knew where the bottom of the market was in the mid-90s!
We have a lot of questions that need answers.
We can see factors impacting our market, listed below, but we cannot state to what degree these influence our current market and what the future will hold, as these factors will remain important for years to come.
- Unprecedented overnight lending rate increases (for the current generation)
- Low housing supply (fewer owners are selling, driving up demand)
- 500,000 people are coming to Canada in the next year and a bit. Many will land in TO.
- Job losses continue to occur in the tech industry (what has been a growing industry here in TO)
- Rents are climbing
- Commercial office space has a reckoning coming (employers don’t need the space, rents will go down, renewal borrowing costs for asset holders will be far higher than their current rates – next 1-5 years; how does this impact the banks and other lenders?)
- Nearly half of the Realtors (currently 72,000 members!) in Toronto began working in the last 5-10 years – they believe that the market always goes up with aplomb.
- The current generation of buyers believes that FOMO is the way it “should be” versus some modicum of balance, which further drives demand. When you decide to buy, you buy, no matter how long it takes.
We continue to weigh the above factors and many others as we guide our clients into what best serves their needs, whether that be a family home, a downsizing option, or a wise investment.
We are curious to see how the next 12-24 months play out.
Toronto Real Estate Market Report – May 2023
May 2023 was extremely quiet in Toronto’s central areas. There were only 1634 sales. Toronto’s real estate has begun its recovery. Our overall annual markers will provide a better sense of value increase, which you can reach out to us here to discuss.
Detached Home Values
There were 359 sales in central Toronto in May 2023. The average home sold for $2,587,653, down 3% since May 2022 (we are now seeing the year over the years values come into place, there is no doubt that the correction has taken hold of our real estate market.) The average home was on the market for 13 days – below the Toronto average days on the market – this tells us that active buyers want to buy today.
Semi-Detached & Townhouse Values
There were 250 sales in central Toronto in May 2023. The average home sold for $1,547,032, down 1% since May 2022. The average home was on the market for a relatively short time compared to the TRREB days-on-market average of 9 days.
➤ Check out our top reads for anyone thinking about living in Toronto:
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Toronto Condo Values
There were 1,025 condo sales—the average central Toronto condo sold for $881,730, up 0.5% from May 2022. The average condo was on the market for 18 days – condos are beginning to move more quickly as buyers accept the interest rate hikes. Note that the correction has not impacted Toronto condos as much as the freehold housing market.
Contact us here and read through our blogs to learn more about Toronto real estate.
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