Brian O'Donoghue

Auto lovers can soon park their toy in its own condo. This is going to be a luxury item people don’t need, but people are going to want to have this. Metropolitan Commercial Realty is planning to convert a multistorey 1970’s-era industrial warehouse in Etobicoke into a palace for storing cars, appropriately named ToyBx.

But while the plan has a decent chance of finding enough Toronto-area car lovers willing to buy one of the 195 separate units (each capable of holding at least four cars with a car-stacker rig) and 39 penthouse suites, all spread across three floors, some have seen the idea as an extreme example of a land-use system so broken that it’s easier to create apartments for cars than for humans.

They have not released pricing details to the public yet, but buyers could expect rates close to what a parking space costs in downtown Toronto residential condominiums, somewhere between $80,000 to $120,000, and the units start at 565 square feet.

Car storage is not just for the super-rich. People collect them for emotional reasons. A ’67 Camaro is just as important to the owner as the $300,000 Ferrari is to the person who parks it over the winter. In neighbourhoods where houses are historically protected, a lot of times they only have one-car parking and for those who can afford some of the high-end condos, parking is limited.

The company doing this is not insensitive to concerns from housing activists, but the building is smack in the middle of an area zoned for industrial uses by the City of Toronto and they don’t foresee a path to rezoning the land. The building in question was formerly part of a distillery. It was built out of concrete to serve as fireproof storage for aging spirts. As such, it’s practically a bomb shelter, with floors that could manage the weight of thousands of tonnes of liquor. The embodied carbon alone of the 180,000 square-foot structure makes re-using it a greener option than tearing it down.

 Prospective homebuyers in the Greater Toronto Area found dramatically fewer homes on the market last month than they did a year ago. October was another record-setting month for Toronto and the GTA with the average year-over-year selling price up 19.3% to $1,155,345. The Toronto Regional Real Estate Board said that 9,783 homes in the region changed hands last month, down nearly 7% from a record 10,503 in October 2020. Despite the fall, the result was still the second-highest level for the month of October even as the number of new listings fell by about a third compared with a year ago.

TRREB interpreted the numbers as a sign of tightening conditions in a market that is already among Canada’s most expensive and prone to some of the country’s most fierce bidding wars. House prices continued to lead the market as they have throughout the pandemic, but condos also showed double-digit price growth in October. The average price for a condo in Toronto is $739,647 and in the GTA $703,698 TRREB’s data showed new listings decreased to 11,740 in October, a more than 34% drop from 17,806 during the same month last year.

Detached homes hit an average price of $1.54 million in the GTA soaring 27% compared to last October. Detached homes in Toronto continued to be the most expensive residential properties selling for an average of $1.78 million up 21%. In the City of Toronto, home prices moved quickly but not quite as fast as they did in the 905 region. Compared to the same month last year, a typical home is now 15.6% ($155,600) higher. Extremely fast growth but this tells us suburban home prices are growing even faster.

Rising interest rates, something the Bank of Canada signaled last week could happen as early as spring and could push some home buyers to the sidelines if they are on the edge of being able to afford a home. Adding to that, over the next year, we’re set to see much stronger population growth as borders start to open more and allow for more immigration.

Investors who own multiple properties within the city has in recent years overtaken first-time homebuyers as the biggest slice of Toronto’s home-purchasing market, according to a recent report by Teranet.

As recently as 2016, Teranet — Ontario’s title search and registration provider, found the most common kind of person purchasing a Toronto home was a first-time buyer. But from 2016 to 2018, things changed. Multiple-home owners — a group that includes real estate investors as well as those who own a vacation home like a cottage — became the most common kind of homebuyer throughout the city. This year, between January and August, Teranet found that multiple property owners made up 29 percent of Toronto purchases, nudging first-time buyers at 28.5 percent.

And across the country, Equifax Canada has noted a multi-year surge in people with more than three mortgages, with a 7.7 percent increase between June 2020 and June 2021.

While some believe investors are taking away supply from prospective homeowners looking for their primary residence, others say they have the potential to provide needed rental supply. Experts say the exact degree to which investors have affected that growth is unclear. John Pasalis, president of Realosophy Realty, presented it as a sort of chicken-or-egg question: did the surge in investors lead to rising home prices, or did rising prices attract more investors?

Either way, he sees the increase in multi-home ownership as yet another challenge facing hopeful buyers searching for their own home, particularly in the competitive single-family house sphere. Pasalis noted that investors were often attracted to average or below-average homes where they saw potential to increase the property’s value. With more capital at their disposal, Pasalis said investors could often be more aggressive in bidding wars.

As of the last census report, slightly more than half of Toronto households owned their homes — 53 percent versus the 47 percent who rented. Of homeowners, 61 percent lived in single-detached, semi-detached, or row houses, while 87 percent of renters were in apartments.

He believes there’s more to the equation, though, noting some older properties are in a state where they require extensive renovations to be in livable shape. Not everyone has the time or money to do those kinds of renovations, he said, particularly someone who barely eked out a down payment.

September marked the transition from the slower summer market to the busier fall market in the Greater Toronto Area (GTA). Every year, we generally see an uptick in sales, average selling price and listings after Labour Day, and September was no different. Sales increased relative to August, and in September, 9,046 sales were logged through MLS, making it the third-highest mark on record for the month of September. The 905 area of the GTA represented the majority of the sales, with 5,649 transactions.

The GTA suburbs are seeing prices rise much faster. For all home types, the average selling price was up 18.3% year-over-year to $1,136,280 in the GTA. The City of Toronto saw prices move in the same direction, but at a slower rate. The average sale price for the City of Toronto is $1,090,196 up 6.7% year-to-date.That would mean suburban price growth is significantly outpacing growth in the City of Toronto.

Detached property types within the 416 area are the priciest on the market, having grown 19.5 per cent annually in value to an average of $1,778,928.

On an annual basis, September sales were down 18 percent from 2020’s record-breaking levels. This is mostly due to the lower quantities of new listings, which TRREB says have dropped 34 percent year-over-year. Across the GTA, 13,483 new listings were added to the market last month, approximately 7,000 less from the 20,441 homes that came online during the same period last year. The majority of listings that became available in September were recorded in the 905 area, with 7,537 new properties. TRREB attributed a resurgence in the condo market as a factor behind the higher share of listings sold during September.

Jason Mercer, TRREB’s chief market analyst, pointed out that last month’s price growth was supported by the low-rise market segments, which include detached, semi-detached, and townhome properties.

“However, competition between buyers for condo apartments has picked up markedly over the past year, which has led to an acceleration in price growth over the past few months as first-time buyers re-entered the ownership market,” he said. “Look for this trend to continue.”

The Canadian election is over, and the country’s leadership remains largely unchanged. However, a laundry list of election promises means big changes to real estate are coming. Most of the promised plan seeks to create more demand for housing, which softens price drops. Expect more of the same currently being done, but with a revamped buying and selling process. Here are some of the promises the Liberals are proposing under the “Home Buyer’s Bill of Rights”

• Banning bidding wars – Sellers would be required to tell buyers the dollar amounts of competing offers on properties. Currently, most bids on homes are “blind,” meaning buyers are unaware what others are offering to pay

• Ban foreign buyers from buying residential properties for two years

• A new tax-free savings account for first-time buyers

• Establishing a legal right for buyers to conduct home inspections

• An anti-flipping tax if the property is sold within 12 months of purchase

• The pricing history of properties to be made public

• Lenders to give mortgage deferrals for up to six months if a homeowner loses their job

• Realtors would be required to disclose if they are representing both buyer and seller (double-representation situations are seen as potential sources of conflict of interest)

• 25% lower rates on CMHC mortgage insurance

•Renovictions – slap a tax on what they deem excessive rent increases where landlords oust tenants to renovate units and jack up the rent

• To build, preserve or revitalize nearly 1.4 million homes over four years

• Investing $4 billion in a new Housing Accelerator Fund for municipalities

• Pledging $1 billion in loans and grants to develop a new rent-to-own program between landlords and renters

Most of these measures are regulated at the provincial level currently. It’s unclear how the Liberals would push through the majority of changes because real estate law falls under provincial and territorial jurisdiction.

For example, the industry is super duper upset about a ban on the blind bidding process. The implementation at the federal level would require criminalizing the process. Regardless of whether you’re in favor of the ban or not, going over provincial territory isn’t easy.

This brings us to our last point — these are promises, not definitive plans. A lot can change between now and implementation, especially if home prices weaken.

 The August consumer price index (CPI) inflation rate was released this week and it’s up to 4.1%. The last time the rate was higher was in March, 2003 (4.2 per cent). Probably the biggest factor in this year ’s inflation surge is simply the reality that consumer prices fell to unusual lows last year, and it’s against these low prices that we are measuring the current price environment.

But from a broader historical perspective, 4.1% is, comparatively, nothing. Inflation was north of 10% in the mid-1970s and again in the early 1980s. In the early 1990s, when the Bank of Canada formally adopted maintaining low and steady inflation as its primary monetary policy objective, inflation still hovered around 5%. But since the central bank set its inflation target at 2% in 1995 – using interest rates to help steer inflation toward that rate – inflation has averaged very close to that target.

Interest rates are considered the bigger weapon to slow inflation, but the bank has said that it doesn’t want to turn to rate hikes until the economy has returned to full capacity. The exact moment when interest rates start to rise will be determined by economic indicators such as employment bounce back and whether inflation goes down on its own, but the Bank of Canada is currently projecting it will hike rates next year. It will also inevitably be influenced by what the U.S. central bank does, simply because getting too far out of sync with U.S. rates affects the loonie and our exports.

Interest rates certainly have an impact on the price of houses. They had a strong upward effect on house prices as rates fell, and the opposite will almost certainly happen if interest rates begin to rise. In Canada’s hottest markets, including Greater Vancouver and Toronto regional housing data released early this month showed little sign of cooling in August. 

Is the real estate market slowing down? We are getting asked that question a lot these days. A summer slowdown is normal for the real estate market as we transition from the intensity of the spring market into the summer market, and this shift happens almost every year. Last year was different because we experienced the spring market in June and July because of the pandemic lockdown.

It’s still a seller’s market. There are still plenty of buyers out there and demand still outweighs supply. But we are seeing diversions, now that a majority of the population is vaccinated and buyer’s attention is focused on trips, events, and visiting friends and family rather than solely on their home search.

Homeowners planning to sell should not worry that the bottom is falling out of the market, but expectations should change compared to previous months. Here’s what the shift might look like:

• Fewer total offers on competitive homes

• Fewer properties selling within the first week

• Fewer homes being listed for sale

• Buyers being able to negotiate a better deal

• Less extreme price escalations

• Listing your home at market value – if you had an offer date set intentionally listing low and were hoping for a bidding war and you didn’t get what you hoped for, then re-listing at market value might be the right strategy

As markets stabilize and demand begins to moderate – something that was signalled in the data for May – one of the greatest challenges for agents in their role as trusted advisors is identifying those expectations and realigning them. Agents who play the long game will attest to the benefit of educating their clients with real-time data to manage expectations upfront, over dealing with disappointment and frustration down the road.

The more interesting trend we have been seeing is a month-over-month decline in home sales since the peak reached in March. March to May is typically a period when home sales are increasing from one month to the next, but the effects that COVID-19 has had on the real estate market continue to distort the traditional seasonal trends in the market. The average house price in May was $1,312,334 while the median was $1,140,000, up 32% and 33% respectively over last year.

There has been some cooling over the previous month, and a slight shift away from a tight seller’s market to a more balanced model was likely to emerge. Nobody ever thought that this frenzy could continue at this pace. A balanced market can make for great buying opportunities, especially for first-time buyers.

What will downtown Toronto look like when the pandemic is over? Will the core regain its former glory? Among those who could work remotely, many swapped their micro-condos for houses with big backyards in small towns.

The question is not whether downtown Toronto will rebound from Covid, but how. What innovations and improvements can emerge from this pandemic? An army of city planners, advisory committees and think tanks have spent the last year pondering this question. They envision a downtown that’s no longer just a place where commuters converge, but a vibrant neighbourhood unto itself.

There are currently more cranes in the sky in Toronto than in New York and Los Angeles combined, building a staggering number of residential units. Urban thinkers are predicting that developers will start converting vacant office spaces into condos, perhaps with their own built-in co-working spaces. The city expects the number of people living south of Bloor to double within 20 years, and developers are keen to cash in on the demand. Before the pandemic, Toronto was the fastest-growing metropolitan city in North America.

For all the destruction the pandemic has caused, it has also provided Toronto with a window to catch up, to build enough homes for everyone who wants to live here. The people behind the downtown’s newest towers see Covid as a pause in the city’s growth, not a full stop, and they are betting big on the promise that Toronto will eventually resume its pre-pandemic hot streak.

Last winter, even as the city was anticipating the dreaded third wave, nearly two-thirds of people who worked downtown pre-pandemic said they’d be comfortable returning to work. The figure will only rise as the virus wanes and other parts of the city core - the clubs, theatres, and restaurants reopen. Toronto Life

 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.

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.

 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

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.

 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!

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.

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.
 

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.

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.

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.

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 .