Calm Before the Storm
Another strong month of sales as the Toronto Real Estate Board reported the sale of 8,596 homes, at an average price of $1,070,911, up 12.6% over August 2020. The only factor that prevented more sales from taking place was the lack of homes for sale. Only 10,609 homes came on the market in August, 50% less than normal, and of course, without inventory, sales cannot take place.
I believe the reason for the low number of homes coming up for sale is the fact that with the Covid restrictions relaxing, and the summer weather, most of the people who would have place their homes for sale decided to enjoy the summer, and postponed their plans for selling until after Labor Day.
While more homes will come onto the market in September, it’s not going to solve the multiple offers phenomenon or increases in prices, as there is still a greater interest in purchasing homes as opposed to homes available for sale. This situation will become worse once immigration into Canada resumes.
The federal parties vying for office in the upcoming federal election have all made housing supply and affordability a focal point. Working with provincial and municipal levels of government on solving supply-related issues is much more important to affordability than interfering with consumer choice during the home buying and selling offer process. Not only does an average building permit cost a builder between $100,000 to $175,000 per lot, adding insult to injury, that process can take anywhere from 3-5 years due to government red tape. Solving that bottleneck will go a long way to bringing supply up to the level of demand and stabilizing prices.
As we head into the fall market, we will see a continuing increase in the price of condominiums due to the demand from both foreign and domestic students, new immigrants and a higher demand for Airbnb as the number of visitors into Canada returns to traditional levels.
While our prices appear to be high for many people, we’re still very inexpensive compared to other world class cities such as Tokyo, Paris, London and New York. It’s a great time to invest in Canada and condominiums are a perfect medium to do so. If you are considering an investment property or upgrading your home, please contact me and let me put my expertise to work for you. If your children are about to attend university or will be attending university in the next few years, let’s chat about how I can make this a great time for you to buy an investment property and help you and your family for the future.
I hope you enjoyed the summer and look forward to speaking with you!
Happy New Year to all who are celebrating Rosh Hashana.
Have a great September!