Brian O'Donoghue

Sales Representative

Direct 647-405-3126 | bodonoghue@bosleyrealestate.com

 Canada’s bank regulators are pondering whether to change the mortgage stress test rules to make it tougher for consumers to buy a home and take some heat out of the housing market. The Office of the Superintendent of Financial Institutions (OSFI) announced that it is reconsidering the stress test that requires borrowers to qualify for uninsured loans at two percentage points above the market rate or the Bank of Canada’s five-year rate – whichever is higher. The minimum qualifying rate adds a margin of safety that ensures borrowers will have the ability to make mortgage payments in the event of some change in circumstances, such as a loss of income or a rise in interest rates.


Under the current stress-test a household with an annual income of $100,000 and a 20% down payment would qualify for a home valued at $651,000, according to Ratehub.ca. That is based on a five-year fixed-rate mortgage of 1.78% amortized over 30 years. The proposed changes would mean the same household would qualify for a home worth about $618,000 – five percent less. You would need to wait to get a bigger down payment or alter your search criteria.


The GTA has seen home prices rising year over year, by percentages into the double digits, but the market gains are being fuelled by real demand rather than speculation, as it was in the overheated markets of 2016 and early 2017.


OSFI says it will decide what it will do by May 24 and if so, changes would take effect by June 1st. It is unknown if the federal government will introduce additional measures when it unveils its budget on Monday. Although Canada’s bank regulator plans to make it harder for borrowers to qualify for a mortgage, economists do not expect this to have a big impact on prices, nor break market psychology that home prices will continue to rise.

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Toronto has been ranked among the five most expensive cities for real estate in the entire world. A new report which looks at average income versus housing prices, found that housing affordability worldwide continued to deteriorate throughout the pandemic. Toronto scored 9.9, compared to the worst offender, Hong Kong, which scored 20.7, Vancouver was ranked second at 13.0, followed by Sydney 11.8, Auckland at 10.0 and San Francisco at 9.6. Other stats have shown you now need to have an annual income of at least $178,499 to afford to enter the Toronto market, with the average price for a detached home in the city now more than $1.5 million.


Thanks to low interest rates and a desire to have more space during pandemic lockdowns, the housing market has followed up a decade of steady gains. The term bubble is starting to be used in connection with real estate. The effect of rising prices on affordability is a worry among some who feel they will never be able to afford a house.


Older generations, especially those who bought homes during the high-interestrate era of the early 1980’s experienced affordability problems of their own. Imagine paying over 18% interest on a 30-year fixed mortgage? Affordability dropped to an all-time low and priced most Canadians out of the market. So why are current buyers unwilling to equate the challenges of previous generations to the current situation?


While some economists are warning the Toronto housing market could be approaching a bubble, others are stopping short of using that term. What’s different now? Economists believe the “fundamentals” of the Toronto market -the economy, interest rates, population growth and the sources of demand for housing are far more solid than they were in the late 1980s.

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 The spoils of pandemic wealth have added billions to Canadian households and to their total wealth unexpectedly during this past year. In every province, net worth is on the rise. About two-thirds of the average wealth gain came from rising home values, with the rest owing to a surge of savings. It’s a situation that bears little resemblance to past recessions. Disposable income is up sharply, home prices have never been higher and stock markets erased their losses months ago.


Ontario saw its average household wealth rise by close to $50,000 or 7.2%. Roughly three-quarters of that was driven by real estate. In the Toronto and Ottawa areas, the average gain in home values was around $43,000 over nine months in 2020. The wealthy have certainly benefited. In high-income annual neighbourhoods, where average annual household income is between $190K and $300K, home values rose by an average of $106,000.

In lower-income areas, it was less than $10,000. Keep in mind these are just averages. Some home values have way exceeded these numbers.


The key driver of wealth was savings. Over the first nine months in 2020, households in Canada saved in excess of $200 billion. The vast majority going to deposits, which include savings accounts, GIC’s and term deposits. The rest was used to pay down debt like credit cards.


The other side of the net-worth equation is debt. Statscan figures show Canadians lowered their non-mortgage debt last year, but also added $118 billion in mortgages, the largest annual increase on record. The value of real estate assets climbed by significantly more than mortgage debt, helping to bolster wealth. The Bank of Canada announced this week it wouldn’t be raising interest rates until inflation consistently stays around two per cent, something it doesn’t believe will happen until some time in 2023. Mortgage rates have already started to edge up as markets start to take note of several positive economic signals

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More than two-thirds of Toronto condo investors are planning to sell their properties rather than pay the new vacant home tax, according to a new Toronto Regional Real Estate Board (TRREB) report. Toronto City Council voted to create an implementation plan for a vacant homes tax in the city which would take effect sometime in 2022. The tax would encourage owners to sell or rent out their vacant properties, which would increase housing supply, the City of Toronto said in a news release. Those who do not would need to pay the tax, and proceeds would go toward building new housing supply.


A total of 40 % of those polled at the end of last year said that they intend to sell their investment property in the next year in part due to a prospective vacancy tax, as well as further restrictions on Airbnbs. TRREB has been up front in asking the City to be prudent with its implementation of the tax, calling for exemptions for snowbirds, U.S. citizens, commuters, and other groups.


Using data from Vancouver ’s implementation of a vacant home tax as an example, if one per cent of Toronto’s housing stock is vacant, at a tax rate of one per cent on the average Toronto home’s current assessed value, this could equal $55 million to $66 million in tax revenue per year. Toronto’s tax rate will be determined in the tax development process. Determining how a home is deemed vacant will be part of the tax development process, but residential property owners would be required to make a declaration each year about the occupancy status of the home.


On another subject, TRREB is applauding Toronto City Council for listening to the concerns we expressed and has decided to NOT implement an increase to the Municipal Land Transfer Tax on homes priced over $2 million. Had it been approved the portion of the property value over $2 million would have been subject to a 3.5% land transfer tax rate, up from 2.5% - a 40% increase.

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 This week the Toronto Regional Real Estate Board (TRREB) released its annual Market Year in Review & Outlook Report for 2021, projecting optimism for a booming Greater Toronto Area (GTA) real estate market in 2021. The report forecasts near-record sales numbers of 100,000 units, with average selling prices expected to break records and exceed the $1 million mark.


The blazing start to the year comes from a strong finish in 2020. January recorded 6,928 sales which represents an over 50% increase measured year-over-year against January 2020. Sales growth was recorded in all market segments, including condominiums in both the 416 and surrounding 905 regions. New listings also increased year-over-year, though at a less pronounced rate, which led to a tightening of market conditions versus the previous January.


The average selling price for January 2021 spiked 15.5% year-over-year to $967,885, driven primarily by the low-rise market segments as condominium apartment prices dropped in Toronto during this period. Despite this, TRREB expects that the continued growth of condominium sales could soon lead to sales growth outpacing listing growth, and renewed condo price appreciation.


Is the real estate market picking up steam at an uncomfortable pace? One just has to look at the number of multiple offers and wild bidding wars to know that demand is at an all-time high. Hopefully, as we start moving into the spring market let's hope listings become more plentiful, especially after this long weekend and the kids are back at school. Let us take this weekend to be with family and see what next week brings us. Happy Family Day!

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The Toronto condo market had cooled during the pandemic, but in this new year so far condo sales are booming. The month of January 2021 is holding December’s gains with sales activity in the 416 nearly doubling that of 2020 on a year-to-date basis. Although the Toronto rental vacancy rate increased, December of 2020 ended the year strong with an amazing turn of events that boosted market conditions with Toronto home sales up 64.5%. Last December’s data showed a big increase in demand for condos by investors who understood this was the beginning of a great time to get back into the market.
 
Analysts say low interest rates and a light at the end of the COVID-19 tunnel is driving up demand for condos in the city and the momentum isn’t stopping anytime soon. Real estate experts are all surprised by the pace of the market and suspect that the vaccine rollout has had an effect on buyers. And while there aren’t as many people from outside of Canada purchasing condos, the demographic of buyers has changed. The fact remains that downtown Toronto has a limited supply of land. Anyone who follows real estate trends can understand why downtown Toronto is beginning to catch more condo investor interest.
 
Toronto condo prices are still down about 5% year-over-year and down about 10% in downtown Toronto from their peak back in February 2020, which presents a good buying opportunity. The condo market has been traditionally reserved for first time buyers and downsizers, but as freehold home ownership becomes less affordable, we expect even more activity. Once activity ramps up mid-2021, it won’t be surprising to see condo prices rising to new levels.

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Toronto’s vacancy rate on apartments hit 5.7% in the fourth quarter of 2020, the highest level the city has recorded in 50 years, after nearly a decade of being under 2%. As the pandemic pushed tenants outside the core of the city, the vacancy rate in the 905 areas surrounding Toronto remained at a much tighter 2%. These results are just an example to just how drastically the pandemic altered the rental market.

As vacancy rates rose last year, rents declined. A study from Rentals.ca last week showed the average monthly rent for a one-bedroom apartment in Toronto fell 20% year-over-year in December to $1,832 and a 17.5% drop for a two bedroom to $2,416. Condo leasing activity soared 25% last year to a record 38,366 units. The average rent for condos, unlike apartments, dropped 14% to $2,076 across the Toronto region, the lowest since mid 2017. Rentals.ca predicts rents could continue to decline for the next three or four months because of weaker demand and more supply.

The freehold market on the other hand is starting off with a bang! The biggest source of concern are listings. The buyers are out there circling, and the weather has been kind to us, but the multiple offers are starting up again. Stories of a townhouse in Mississauga having 71 offers to a house in Oshawa having 47 offers. With low borrowing costs and high demand, the supply issue again is of concern. Are potential sellers reluctant to list their properties for sale in this uncertain market? The buyers are out there waiting. We remain cautiously optimistic!


Bosley Real Estate Ltd. is a full-service boutique brokerage operating in Toronto, Muskoka, Niagara-on-the-Lake, Port Hope and Cambridge, Ontario since 1928. We have three centrally located offices in Toronto and over 250 sales representatives selling and leasing homes and condominiums in all the vibrant communities we work in. Our brand is well recognized internationally thanks to our unique affiliation with Leading Real Estate Companies of the World. Our sales teams meet weekly to discuss market conditions, trending topics, and anecdotes that more accurately reflect the true temperature of the real estate market.
 

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The Holiday Season is upon us, and we have almost made it to the end of one of the most challenging years any of us can remember. When we felt we could control so little, we at least needed to control our space. Our homes have become our refuges, as we spend more time there. We’ve adapted our homes to be our offices and our schools, our restaurants and retreats. We’ve started to think more deeply about what home means and how to create it. 

After briefly being put on hold during the outbreak this spring, Canada’s housing market has seen record-breaking growth since the summer. Record-low interest rates and strong demand for more spacious accommodation are pushing prices and sales to near record highs. It will be a photo finish, but it’s looking like 2020 will be a record year for home sales in Canada. And, as we look forward to the new year, 2021 looks like it could be shaping up to be another unprecedented year, based on new housing market predictions. The strength of demand, particularly for larger single-family homes, will drive the average price higher as buyers compete for the most desirable properties. 

Have we ever been more primed to say “so long” to one year and welcome in a new one? Although things are still far from perfect, we’re feeling a renewed sense of hope for the future with the turning of the calendar page and looking forward to setting the reset button on life. It will be a holiday season unlike any we have known before, but it is still a time to celebrate those we cherish, even if it’s not how we did it last year. If there are any positive takeaways, it’s having time to pause and feel gratitude, as well as having a deeper appreciation for home, our greatest place of comfort. Let’s raise a toast to one another and to our hopes for the new year to come.

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November brought a sense of urgency to the Toronto real estate market, where Covid has people buying and selling homes for completely different reasons than before the pandemic. Data from the Toronto Regional Real Estate Board showed that November home sales in the Greater Toronto Area were up 24.3% compared with last year, as demand for single-family homes continued to surge ahead of condos.

There were 8,766 homes sold in November up from 7,054 in November 2019. The average sale price is $955,615, up 13.3% from $843,307 a year earlier. 11,545 homes were listed for sale in November, up from 8,651 in November of last year, as the market catches up from spring’s slowdown. While detached home prices rose to an average of $1,202,281, up 15.2% from November 2019, average condo prices fell 2% to $605,863. The number of condos that hit the market this November was almost double that of November of last year. There has been a total of 150,913 listings in the Toronto area so far this year, compared with 149,241 at this time last year.

But regardless, our inventory is still low. The search for more living space continues to take buyers to the suburbs and beyond. In the suburban areas, we are still seeing bidding wars. It’s highly competitive and properties are not sitting long. Several Canadian economists recently surveyed believe that record low interest rates have been keeping buyers interested and prices high in Canadian real estate. With low inventory and growing demand, they expect that housing values in Canada’s largest markets could see a 5% increase in 2021. The conclusion is that home and work will become entwined more intimately in the future and that living space needs to be reviewed to accommodate such a future.

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The Toronto region had its fourth consecutive month of record sales volumes in October with 10,563 homes sold, up 25% from October 2019 and the Toronto Real Estate Board is forecasting record or near-record sales to continue through the balance of the year. The average sale price for the GTA was up 13.7% to $968,318 and for the City of Toronto it was up 10.8% to $1,025,925. Detached homes led the way, with sales up 33.9% and an average sale price of $1,204,844, an increase of 14.8%.

New listings for all categories of homes rose to 17,802 across the GTA, up 36% from October 2019. Condo listings more than doubled to 6,193, compared to October 2019. Sales of condominium apartments fell 8.5% in the City of Toronto compared to the same month in 2019, with prices up just .8% to $668,161. Active listings are up 158% in Toronto to 5,719 units. As the pandemic slowed economic development and halted tourism in the city, the short and long-term rental income many investors relied upon dried up. If you are looking to buy a condo it’s a buyer’s market now and you will benefit from more choice available
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The strongest gains across all re-sale housing categories occurred in the 905 communities outside Toronto, where buyers can often afford a little more space. Suburban areas that once lagged desirable city addresses are now roaring hot as home buyers wearied by lockdowns seek bigger yards and larger living spaces. Tight downtown condo markets that previously commanded expensive rents are now thick with supply. And the flow of immigrants that typically fuel demand for housing of all types has slowed to a trickle.

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Housing lot sizes continue to shrink. There are many attractions of suburban houses, but one of the key selling points was that as you move out of the city you will get more land and more backyard. Think again. That metric is under stress in Canada’s most populous region, and new buyers are finding that the average lot size is shrinking. 

For single-family detached homes, the average lot size offered by Greater Toronto Area builders was in the average range of 40 to 41 foot lots over the past five years. But in 2020, that number dipped sharply – to 37 feet on average – and the average of all ground housing frontages (which includes townhouses and detached homes) dropped from 29 feet in 2019 to 25 feet in 2020. 

The frontage number can be misleading because for decades it assumed the average lot depth might be 100 feet at least. But in recent years some builders, led by Canadian mega builder Mattamy Homes, have innovated on lot shape by shrinking that depth to 70 or 80 feet while keeping a more standard frontage. These stubby lots can pack in more housing on a given land parcel while maintaining the curb appeal of more spacious developments. 

Ontario’s 2006 growth plan helped raise prices for raw and developable land, but other pressures have also raised the costs of building the actual homes. One example pulled out of MCAP’s data shows two phases of a North York detached development, the first one in 2015 and the second one selling in 2020. The price per house on generous, 45 foot and larger frontage lots jumped from $1.68 million in 2015 to $2.76 million in 2020. But at the same time, the costs to service the lots nearly doubled, from $737,000 to $1.4 million; the hard construction costs on each house went up close to $100,000; the HST bill almost doubled; and the soft costs (sales/broker commissions; marketing/sales office and maintenance, architects, design, and other consultants, construction loan interest and fees) went up $135,000. 

The result was that even though the 2020 house sold for $1 million more, the 2015 profit of $164,250 was virtually the same as in 2020, at $166,650. The rising costs of doing business for the same profits could explain why there were more than 11,000 ground-related houses launched for sale in 2015 and 2020 will end with only 5,200 units.

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Thanksgiving marks a special time of year in which we express gratitude and something to be thankful for. This year is going to be a little different. Gathering around a table with loved ones to enjoy a bountiful feast will have to wait. We have to plan to make sure this year ’s Thanksgiving holiday is safe during this pandemic, Canada’s top public health officer has urged, as case counts continue to soar in several parts of the country, especially Ontario and Quebec.


Toronto’s housing market soared in September. Another month where sales and prices hit record highs, with historic low mortgage rates enticing buyers despite the worsening virus crisis. Last month, 11,083 homes sold in the Toronto region, a 42-per-cent increase over September of last year, according to the Toronto Regional Real Estate Board (TRREB), with the biggest gains in the 905 and regions surrounding the City of Toronto. That was the third straight month of record sales volumes.


Competition for detached and semi-detached houses helped send the average selling price across all types of properties up 14 per cent to $960,772, compared with the previous year. For the City of Toronto, the average sale price is $1,022,051. Prices have been climbing month over month since May, after the slowdown in April. Despite the new listings, competition is fierce for low-rise properties, where there is more square footage and easier access to outdoor space. The regions surrounding the city of Toronto experienced the steepest price increases.


Meanwhile, demand for condos in downtown Toronto has softened as the normal cohort of renters, including post-secondary students, shrinks because of the pandemic restrictions. One-bedroom rental rates have declined by at least 20 per cent since the start of the health crisis, according to local brokers. Having said that, the average price of a condo in the city of Toronto was $686,191, up 7 per cent from September of last year. The average detached home in Toronto saw a 9 per cent increase to $1,487,122 and semi-detached homes were up 7 per cent to $1,145, 559 .

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 Now that fall is here the real estate market is sending us puzzling signs. The GTA benchmark house price has continued to rise; however, condo prices are beginning to drop, and the market is running into strong headwinds.


Homebuyers were sidelined March through May, but in June through August, they jumped back into the market with both feet. House purchases in July and August were the highest ever for those months. Is the market settling into a ‘new normal’? We are watching several key risks:


• A record number of condo apartments for sale and supply is trending higher at an alarming rate. A flood of supply could cause an acceleration of price declines.


• In early September, new cases of COVID-19 were low but rising toward a possible wave 2.


• How well the U.S. manages the pandemic - roughly 25% of the Canadian economy relies on exports south of the border. As well, the US presidential election is just weeks away.


• The CERB and the mortgage payment deferral programs expire at the end of September. These have delayed the full impact of the pandemic on housing.


The frenzy of the last couple of months has calmed somewhat but many pockets of Toronto are still insanely competitive. New freehold listings have been increasing weekly. Sold listings were up 32% last week and of those 74% sold at or above the list price. Hot neighbourhoods like Riverdale and Leslieville had 66 sold properties last week and 56 properties sold above the list price in competition.


The condo market is seeing a record number of new listings come to market. Last week in the downtown core we saw 714 new listings. That is the highest amount we have seen all year. Sales did improve, up 27% from the previous week and the activity was strong with 42% of condos selling at or above the list price. Condos selling below $700K lead the way.

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As of June 30th, banks have provided help through mortgage deferrals to more than 760,000 Canadians, which represents 16% of the number of mortgages in bank portfolios. The banks were so inundated with requests when the initial announcements were made, that roughly 90% of customers seeking a mortgage deferral were approved. By total volume of mortgages deferred, Quebec, Alberta, and Ontario are leading the country. Quebec represents the largest segment, at 27% the mortgages on deferred payment plans. Alberta is second with 26% of the insured payment deferrals. Ontario comes in third with 21% – just over one in five. Pricey BC is in a distant fourth, representing 7% of the pool.


The next great test for banks will be the looming expiry of these payment deferrals expiring before October 31st and won’t be renewed, raising the risk of defaults. If people on deferrals can’t resolve payment issues before the end of the term, they may be forced to sell. Which brings up a whole other set of problems if you only had 5% equity.


There is some good news. BMO and Scotiabank reported this week that so far, at least 90% of clients at both banks whose deferrals have already expired are making normal payments again. The chief risk officer is cautiously optimistic that the rate of recovery will continue. They believe that only one to five percent of deferred mortgages may become delinquent as the grace period expires.


Even though its late August the freehold market is still going strong, with sold properties up last week 13%, compared to the week before and of those properties sold 68% sold at or above the asking price. Again, it’s a shortage of listings that is causing this frenzy. So far this month the condo market has seen a massive increase in new listings, up 11.5% from July. Sales were up moderately 5% last week from the previous week and of those condos sold 38% sold at or above the list price.

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The Ontario Real Estate Association (OREA) recently retained Nanos Research to do a survey among Ontarians actively in the real estate market. The takeaway was that despite economic uncertainty due to the pandemic, homeownership is seen as a good investment. Here are some of the results:


• Six in ten Ontarians active in the real estate market consider buying a home a very good investment even in the current environment.


• Four in ten who are active in the housing market say they would be open to buying a house if they could only view it virtually.


• Eight in ten say it would be important to use a Realtor to help with the purchase of their home, and this is consistent across all age groups.


• Six in ten Ontarians who own a home and plan to sell in the next two years are not sure when they will list their home (61%), while 28% say they will list as soon as the pandemic is over, and 11% say they will list in the next few months.


• A majority of Ontarians say being in isolation at home has not changed their view of what they want in their next home (74%), while 26% say it has changed what they want in their next home.


• Nine in ten who own a home and are active in the real estate market report they have not refinanced their home or used a home equity line of credit to cope financially during COVID.


• Residents of the City of Toronto are most likely to report they plan to buy a home in the next two years (59%), and younger Ontarians (18 to 34) are more likely to report they plan to buy (59%), than those 55 plus (23%). Renters are significantly more likely to report they plan to buy in the next two years (87%) than homeowners (27%).


• Four in ten Ontarians who own their home have taken advantage of the pandemic to renovate, repair or upgrade their home. Asked for the approximate value of the renovations and repairs, $18,960.

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 It’s hard to believe that we are almost half way through 2020 and in the middle of a pandemic, with unemployment at an all time high, millions of people without a job, and the Toronto real estate market couldn’t care less. If you are looking for a Covid-discount you’re not going to find it here. What you will find, just weeks after the worst month of sales, are multiple offers and buyers and sellers with more and more confidence. No one expected the market to take off like this. Buyers were on pause for a couple months, but they seem to be jumping back in with a frenzy. Case in point – we have a listing in our office in Bloordale Village that has 139 booked showings and offers are on Monday. You’re lucky if you can even get in to show it now. No double bookings and only a few time slots left!


Could this be that HSBC just lowered its five-year fixed mortgage rate to 1.99%, becoming the first bank in Canada to crack the 2% barrier? It comes down to supply and demand. With a low supply of available product in the marketplace, the activity taking place is still a sellers’ market. Even though CMHC forecasted housing prices across the country to drop between 9 and 18% over the next 12 months, the 416 does not represent the entire country and the Toronto real estate market doesn’t seem to be adhering to many of the forecasts and predictions. You have to be thinking about where prices are going to be in 10 years, not just in 6 months from now.


Last week the freehold market saw a marginal 6% increase in new listings and of those, 51 listings were listings over 3 million dollars. Sales surged by 41%, and of those sales 57% sold at or above the asking price. The condo market is also seeing an uptick in activity with 22% more new listings last week and sales were up 16%, with 39% selling at or above the list price and the majority of the sales were under $700K.

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 Open houses have been suspended throughout the COVID-19 pandemic and while real estate services were declared essential and have continued uninterrupted, agents have innovating methods for home-showings like Facebook Live, 3-D video tours, Zoom and a good portion of real estate transactions including paperwork occurs electronically. Consumers are adapting during this extraordinary time, and their willingness to embrace new tools tells us that the Canadian dream of home ownership remains strong, even during the COVID-19 pandemic.


Though there has been a drop in listings, the prices in the GTA have largely been unaffected by the global pandemic so far. Nearly half of Ontarians who plan to buy a home in the next two years say that they are willing to consider going ahead with a purchase even if they can only view the property virtually, according to a new poll commissioned by the Ontario Real Estate Association. The poll also revealed that there is a portion of prospective sellers that have held off on listing their properties for sale due to COVID-19, but 54 percent of them are willing to consider virtual showings or somewhat open to the idea. The poll conducted by Nanos Research on behalf of the OREA found that 48.9 percent of prospective buyers are either open or somewhat open to buying a house virtually compared to 46.6 percent who say that they are not open to the idea.


Meanwhile, about 26 percent said that they would buy a home as soon as the pandemic concludes. About 61 percent of prospective buyers and sellers, meanwhile, said that the pandemic did not have an impact on their decisions to list or buy properties.


Meanwhile, last week we saw another 23% jump in freehold listings and a slight increase in sales but of those, 75% sold at or above the asking price. The condo sector also saw a 29% increase in listings and the sales were up 18% with 42% of those selling at or above the list price. While continued tightening of mortgage lending continues, it has not put a damper on the market.

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Home sales are showing signs of improvement in the Toronto real estate market, but economists say it’s far too early to feel optimistic about the possibility of recovery from the devastating effects of COVID-19. Activity in the region improved in May compared with April, according to figures the Toronto Regional Real Estate Board released Wednesday. But it remained less than half of what we saw a year ago. “The pandemic knocked the wind out of what was expected to be among the strongest spring seasons in home-sales history, said Sherry Cooper, chief economist at Dominion Lending.”


There were 4,606 sales in the Greater Toronto Area through the board’s MLS system in May. That’s down 53.7 percent compared with a year earlier. However, sales in May were up 55.2 percent compared with April. The number of new listings totalled 9,104 - down 53.1 percent compared with May 2019, but up 47.5 percent from this past April. The average selling price for the GTA rose three percent from May 2019 to $863,599 and the average sale price for The City of Toronto also rose almost two percent to $955,273.


The buyers are back out and the sellers are getting their asking prices, in some cases, more. Deal hunters may have been hoping to take advantage of a down market, but there is enough demand to keep prices up. It looks like there will be a prolonged spring market and possibly a busier summer. Low interest rates may be drawing people into the market.


Last week we saw a 30% increase in freehold listings come to market. The largest increase since February and sales doubled week-over-week, with more than half selling over the asking price. The condo market also saw a 30% increase in new listings and a 28% increase in sales last week. It seems home buyers and sellers are adapting and becoming more comfortable with the physical distancing requirements.

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As we navigate through these uncertain times, we are wondering what condo life will look like in the future. To illustrate how quickly the condo market changed as a result of COVID-19, resale activity was up 25% year-over-year during the first half of March 2020 and fell 21% year-over-year in the second half of the month, with even steeper annual declines of over 70% reported for April. However, the GTA market was exceptionally tight leading into the COVID-19 period, creating spillover demand that has enabled the limited number of units on the market to continue transacting. In fact, the average sale price-to-list-price ratio has remained near 100% through April, and the average days on market was unchanged at 18 days.


As sales have declined by a much faster pace than new listings, resale condo prices have experienced some reduction. Preliminary resale data for April reported a 2.2% annual decline in average resale prices for condos, and most of the decline has occurred for higher-priced units. Overall, industry experts feel that resale values might be down by 5% at the end of 2020 compared to the end of 2019. Again this is all speculation as no one has a crystal ball.


Toronto rents were also down on all fronts. In April, the average one-bedroom rent in Toronto dropped 2.2% month-over-month to $2,200 and two-bedroom rent fell 4.1% month-over-month to $2,830. The decline in rental transactions can clearly be related to the impact of the protective measures and economic uncertainty stemming from the onset of COVID-19 pandemic, with renters less willing or able to take on a new lease at current rents, as well as the closing of Canadian borders and the challenges with showing units and planning for a move in the current environment.


Of importance, rental supply did not experience the same degree of decline as leases, with new listings decreasing by a more modest 7% in the post-COVID-19 period from a year earlier. The relatively more stable level of new listings may be attributed to a rise in condo completions in the first quarter, tenants unable to pay their rent providing notice to vacate, and some short-term Airbnb units becoming available in the long-term market.

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 In the early stages of the lockdown, most of us were in a state of shock. That has changed as time has gone on. People now realize it will not be the same moving forward, so we are starting to plan for life after the lockdown.


Toronto real estate sale numbers may be down overall, but homes in certain neighbourhoods of the city are attracting avid interest. This week we know of a couple of properties that went wild. A two-bedroom semi in Danforth Village listed at $799K attracted 12 offers and a detached in prime Riverdale listed at $1.8M got 8 bully offers. The hottest-selling price sector in April was the $750,000-$999,000 range for freeholds, which includes semis and townhouses. With 184 sales, it was three times higher than the next price tier which is between $1 million and $1.25 million that saw 61 transactions.


The lowest point for sales was the week ending April 11, with 557 sales in the Toronto region, but the numbers have steadily increased since, to 909 in the first week of May. That is still half of what the sales were in mid-March, but it does represent 63-per-cent growth since the recent lockdown shock. Because active listings continue to decline, the competition for the few houses out there seems to be supporting prices.


It’s hard to see it now but the dust will settle, and we will be left with a new world to navigate for our clients. We do know that whatever the outcome, it will be different than it was before and there is no going back. The pandemic will leave behind the largest consumer shift in world history. People will spend differently, people will have different tolerance levels for risk, and people will need to transact real estate.

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